The 5 Biggest NIS2 Compliance Challenges Organizations Face

The European Network and Information Security Agency (ENISA) received over 2,400 incident reports in the first six months following NIS2’s enforcement deadline—a 340% increase from the previous year. Behind these numbers lies a stark reality: critical infrastructure organizations across Europe are struggling to navigate the directive’s complex compliance landscape.

From energy providers in Germany grappling with supply chain assessments to telecommunications operators in France wrestling with incident notification deadlines, NIS 2 Directive has created unprecedented compliance challenges. The directive’s expanded scope now covers approximately 160,000 entities across 18 sectors, each facing unique implementation hurdles that regulators didn’t fully anticipate.

This analysis examines the five most significant compliance challenges organizations are encountering with NIS2, based on regulatory filings, industry surveys, and conversations with compliance professionals across the EU. Understanding these pain points is crucial for any organization still working toward full compliance—or those preparing for their first regulatory audit.

Executive Summary

Main idea: NIS2 compliance is proving far more complex and expensive than organizations anticipated, with incident reporting requirements, supply chain security obligations, and vulnerability disclosure mandates creating operational and legal challenges that extend beyond traditional cybersecurity measures.

Why you should care Non-compliance carries penalties up to €10 million or 2% of global turnover, while implementation missteps can expose organizations to both regulatory sanctions and increased cyber risk. Getting ahead of these challenges now prevents costly remediation later.

1. Incident Reporting: The 24-Hour Nightmare

The most controversial aspect of NIS 2 Directive isn’t its technical requirements—it’s the compressed timeline for incident notification. Organizations must report significant incidents to national authorities within 24 hours of detection, a requirement that has fundamentally changed how security teams operate.

Why the 24-Hour Deadline Is Problematic

Unlike previous regulations that allowed for preliminary assessments, NIS2 demands immediate notification based on initial indicators. This creates a perfect storm of compliance anxiety: report too early with incomplete information and face scrutiny for false alarms; wait for complete analysis and risk penalties for late reporting. You’re essentially being asked to predict the future as twenty-four hours isn’t enough time to understand if a network anomaly is a sophisticated attack or a configuration error.

Tweetable insight: NIS2’s 24-hour reporting window forces organizations to choose between incomplete reports and regulatory penalties.

The challenge extends beyond timing. Organizations must determine what constitutes a “significant” incident under NIS2’s broad definitions, often without clear guidance from national authorities. This ambiguity has led to over-reporting in some sectors and under-reporting in others, creating inconsistent enforcement patterns across member states.

2. Supply Chain Security: The Undefined Frontier

NIS2’s supply chain security requirements represent perhaps the most ambitious—and confusing—aspect of the directive. Organizations must assess and monitor the cybersecurity practices of their suppliers, but the regulation provides limited guidance on implementation specifics.

The Third-Party Assessment Challenge

The directive requires organizations to evaluate suppliers based on their “cybersecurity risk,” but doesn’t define standardized assessment criteria. This has led to a patchwork of approaches, from simple questionnaires to comprehensive third-party NIS2 audits, with no clear indication of what regulators consider adequate.

Manufacturing companies face particular challenges, as their supply chains often include hundreds of smaller suppliers who lack sophisticated cybersecurity programs. The situation becomes more complex for organizations operating across multiple EU member states, where national authorities have developed different interpretations of “proportionate” security measures. What satisfies German regulators may not meet French requirements, creating compliance fragmentation within the single market.

3. Vulnerability Disclosure: Balancing Transparency and Security

NIS2’s vulnerability disclosure requirements create an inherent tension between transparency obligations and operational security practices. Organizations must disclose vulnerabilities that could affect other entities while avoiding information that could assist potential attackers.

The Disclosure Dilemma

The directive requires “timely” disclosure of vulnerabilities to relevant stakeholders, but doesn’t specify exact timelines or disclosure formats. This ambiguity forces organizations to make judgment calls about when and how much information to share, often without clear legal protection for good-faith disclosures.

Tweetable insight: NIS2 vulnerability disclosure rules ask organizations to be transparent about weaknesses while maintaining security—a regulatory paradox.

Telecommunications operators report particular difficulty with vulnerability disclosure, as their infrastructure often serves as the backbone for other critical services. Disclosing network vulnerabilities too broadly could provide attack vectors, while insufficient disclosure could violate NIS2 requirements.

The challenge is compounded by the directive’s requirement to coordinate with other EU member states when vulnerabilities have cross-border implications. This coordination process can delay necessary security patches while organizations navigate bureaucratic requirements.

4. Implementation Costs: The Budget Reality Check

Early estimates for NIS2 compliance costs significantly underestimated the true financial impact. Organizations are discovering that technical infrastructure upgrades represent only a fraction of total implementation expenses.

Hidden Compliance Costs

Beyond obvious technology investments, organizations face substantial ongoing costs for compliance monitoring, staff training, and regulatory reporting. Legal fees for interpreting complex requirements often exceed initial technology budgets, while specialized compliance personnel command premium salaries in a tight labor market.

Small and medium enterprises face particular challenges, as they lack the economies of scale that larger organizations can leverage for compliance investments.

The most expensive requirement appears to be continuous monitoring and reporting systems. Unlike one-time security upgrades, these systems require ongoing maintenance, regular updates, and dedicated personnel—costs that compound annually without providing direct business value.

5. Cross-Border Complexity: When Member States Disagree

While NIS2 aims to harmonize cybersecurity requirements across the EU, implementation reality reveals significant variations in national approaches. Organizations operating in multiple member states encounter conflicting requirements that complicate compliance efforts.

Regulatory Fragmentation

National authorities have developed different risk assessment methodologies, incident classification systems, and enforcement priorities. What triggers a mandatory report in one country may not require notification in another, creating operational complexity for multinational organizations.

The European Banking Authority has documented over 40 distinct interpretations of NIS2 requirements across member states, ranging from incident reporting thresholds to supply chain assessment criteria. This fragmentation undermines the directive’s goal of creating a unified cybersecurity framework.

Organizations report spending significant resources on regulatory mapping exercises, attempting to understand how different national authorities interpret common requirements. This complexity is particularly challenging for cloud service providers and telecommunications operators whose services inherently cross national boundaries.

Navigating the Compliance Landscape

Despite these challenges, organizations are finding practical approaches to NIS2 compliance. The most successful implementations focus on building flexible frameworks that can adapt to regulatory evolution while maintaining operational efficiency.

Leading organizations are investing in unified security platforms that provide comprehensive audit logs, automated policy enforcement, and centralized compliance monitoring. These solutions address multiple NIS2 requirements simultaneously while reducing the complexity of managing disparate security tools.

The key to successful NIS2 compliance lies in treating it as an ongoing operational requirement rather than a one-time project. Organizations that integrate compliance monitoring into their daily operations report lower costs and better regulatory relationships than those treating it as a separate compliance exercise.

Kiteworks provides critical infrastructure organizations with a unified platform that addresses these NIS2 compliance challenges through standardized security policies, comprehensive audit capabilities, and automated enforcement mechanisms. With validated security certifications and proven integration capabilities, Kiteworks enables organizations to meet regulatory compliance obligations while maintaining operational continuity and protecting sensitive data across all communication channels.

To learn more about Kiteworks and how its Private Data Network can help you demonstrate NIS2 compliance, schedule a custom demo today.

Additional Resources

• Brief How to Conduct a NIS 2 Readiness Assessment
• Blog Post  How to Perform a NIS 2 Gap Analysis: Complete Compliance Guide for EU Organizations
• Blog Post Small Business Guide to NIS 2 Compliance
• Blog Post How Much Does NIS2 Compliance Really Cost?
• Blog Post NIS 2 Directive: Effective Implementation Strategies