How federal agencies can navigate threat trends and digital transformation challenges
As digital dependencies grow, cybersecurity threats rise and the pace of innovation increases, agencies can’t afford to let obstacles impede transformation.
Travis Galloway
October 31, 2025 2:25 pm
4 min read
As federal agencies search for ways to implement the latest in cloud technology and artificial intelligence, they face obstacles that stand in the way of this digital transformation. In fact, according to a recent survey from SolarWinds, only 6% of government IT leaders said their organization had completed its digital transformation journey. Respondents cited obstacles such as data privacy concerns, infrastructure complexities, and budget constraints. When federal agencies struggle in their digital transformation efforts, it prevents them from experiencing benefits such as increased productivity, valuable data integration, and streamlined processes. Further, it can exacerbate the existing and emerging cybersecurity threats that federal organizations face. To mitigate current barriers to digital transformation, federal IT teams can implement cost-effective solutions and leverage IT monitoring tools to streamline integration, identify vulnerabilities and mitigate emerging threats.
A deeper understanding of the IT challenges for federal agencies
Digital transformation and cybersecurity challenges can manifest in the form of people, resources and IT infrastructure. For example, legacy IT infrastructure has played a large role in integration difficulties. Of the survey respondents who cited integration complexities as an issue, more than half (57%) were from federal agencies. Many government organizations continue to use legacy infrastructure — some of which dates back to the 1980s — that wasn’t designed for easy integration between tools and systems. When agencies face an inability to integrate tools, they potentially sacrifice easier data sharing, smoother automation and streamlined workflows.
Federal employees and contractors can also present unique challenges as agencies attempt digital transformation and effective cybersecurity. In the survey, 61% of federal IT leaders said careless or untrained insiders — people with authorized access to IT assets — were a top threat to their cybersecurity. Additionally, federal agencies continue to face external threats to cybersecurity. More than half (60%) of federal IT leaders cited the general hacking community as a top security threat, while 52% pointed to foreign governments.
Many agencies have a clear vision for digital transformation, but the fiscal uncertainty associated with continuing resolutions and budget cuts can slow or stall their journey. More than 1 in 4 (28%) of government IT leaders cited budget constraints as a significant hurdle to their IT evolution. Regardless of budget constraints or other uncontrollable factors, federal agencies are still expected — and required by law — to conduct their mission specific requirements.
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An effective and efficient path to digital transformation
As the digital landscape continues to evolve, agencies utilizing hybrid environments — combining on-premises infrastructure with scalable cloud platforms — face additional inefficiencies when integrating legacy systems with current technologies. At times, organizations may manage their on-premises and cloud environments with two separate observability tools. When IT leaders have a full perspective of their environment in a single observability solution, they are able to more efficiently manage costs, reduce tool sprawl, and fill workforce gaps or reduce full-time equivalents.
Advanced observability solutions can simplify elaborate hybrid IT ecosystems, offering federal IT leaders a way to integrate tools seamlessly across systems. A comprehensive observability approach will also provide federal agencies a single source of truth, garnering rich, centralized insights through a single pane of glass. The right observability tools provide a holistic view of their environment — into both legacy and modern technologies — empowering federal IT leaders to minimize risk, efficiently manage resources, and make informed decisions on advancing their digital transformation efforts.
The right observability solution can also enable IT leaders to optimize their systems through AIOps. According to recent research from SolarWinds on operational resilience, almost half (46%) of IT professionals in the public and private sector believe efficiency improvements are the biggest driver for injecting AIOps into their workflows. Through AIOps, teams can automate tasks in their IT environments such as anomaly detection, performance evaluations and security alerts. Artificial intelligence is a critical enabler for lean IT organizations operating under budgetary and staffing constraints. By automating repetitive and time-intensive tasks, AI helps bridge workforce gaps and empowers teams to redirect their expertise toward the most mission-critical priorities. This ultimately enhances operational efficiency and mission outcomes.
Additionally, observability solutions with AIOps capabilities are vital for mitigating the cybersecurity challenges that federal agencies are facing. Observability solutions should be able to detect anomalies, prioritize those potential threats — based on the agency’s risk tolerance configurations — and significantly reduce mean time to detect and mean time to remediate internal and external anomalies. Limiting alert noise will aid in preventing alert fatigue in IT teams, which allows them to focus on the more critical alerts for their unique mission requirements.
The time for digital transformation is now
As digital dependencies grow, cybersecurity threats rise, and the pace of innovation increases, federal agencies cannot afford to let obstacles impede their digital transformation. The path forward lies in reducing IT complexity and strengthening defenses against both internal and external threats. By implementing a robust observability strategy — enhanced with seamless integrations and AI-driven capabilities — agencies can eliminate data silos, automate routine processes and optimize IT operations. With this foundation in place, federal IT leaders can confidently and securely advance their mission-critical digital transformation initiatives.
Travis Galloway is senior advisor for government affairs at SolarWinds.
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