5 Common Mistakes Most Businesses Make When Delivering a Digitalisation Budget

12 Jan

Key Takeaways

Most digitalisation budgets struggle because of execution and planning, not strategy. The difference between successful transformation and wasted spend often comes down to how you allocate resources, manage stakeholder expectations, and structure your delivery approach.
Your digitalisation budget needs built-in flexibility. Organisations that plan as if they operate in isolation consistently miss targets. Realistic budgets account for competing priorities, existing capacity constraints, and the unpredictability of large-scale change.
The real test of digitalisation success comes months after launch. Many organisations declare victory too early or lose patience waiting for returns. Understanding when and how to measure success separates programmes that deliver from those that simply spend.

Digital transformation has become less of a competitive advantage and more of a competitive necessity. Yet year after year, organisations throw millions at digitalisation initiatives only to find themselves wondering where the value went. The problem isn't always the strategy or the technology but how businesses allocate, manage, and execute against their digitalisation budgets.

Here are five critical mistakes that organisations repeatedly make, and how to avoid them.

1. Investing Without Understanding How to Monitor ROI

The first mistake is deceptively simple: businesses invest heavily in digitalisation but have no clear mechanism to measure whether that investment is actually paying off. As Simon Sinek says, they've lost sight of the "why" and without that clarity, measuring success becomes impossible.

Let's be honest, most organisations pursue digitalisation because of what not doing it will cost them. It's the cost of irrelevance, the cost of losing market share to digitally native competitors, the cost of employee frustration with outdated systems. Digitalisation is often defensive, not offensive. But this doesn't mean you can simply spend the money and hope for the best. You need to ensure you deliver the business outcome. To monitor this effectively, ask yourself these critical questions:

Have you appointed someone accountable for the ROI? Without a named owner responsible for tracking and achieving returns, accountability dissolves. This person should have the authority and visibility to course-correct as needed.
Have you established a realistic timeframe for ROI? Not all benefits realise at the same pace. Some are immediate, others arrive over 18 to 24 months. Be specific about when you expect to see returns, and differentiate between quick wins and longer-term value creation.
Is your start date realistic? A start date that doesn't account for planning, resourcing, and procurement timelines is a start date that will slip. Build in buffer and be honest about dependencies.
What risk mitigations are in place? Every major digitalisation effort encounters obstacles. Have you identified what could go wrong and how you'll respond? Have you planned for resource constraints, scope creep, or technical complications?
How will you increase the likelihood of success along the way? ROI monitoring isn't done one, rather, it's continuous. Weekly check-ins, monthly reporting, stakeholder reviews, and course corrections should be built into your delivery governance.

2. Budgeting for the Build, Not the Transformation

Here's where most organisations significantly underestimate their digitalisation budgets: they fund the initiative, the architecture, the build, and the development, but they starve the implementation, adoption, and change management.

Think of it like building a hospital. You can spend billions on state-of-the-art equipment and facilities, but if your staff hasn't been trained, if your processes haven't been redesigned, if your patients don't understand how to use the new system, well, then that hospital won't deliver better health outcomes. The building is just the vehicle, and the transformation (or real outcome) is in how it's used.

Most organisations allocate the majority of their digitalisation budget to the technology build and treat everything else as an afterthought. Industry best practice suggests a very different split: roughly 30-40% on build, but 40-50% on change management, training, adoption, and sustained support. This is because people, process, and capability development are the true costs of successful transformation.

When you skip or underfund this element, what happens? Users resist the new system. Productivity dips post-launch. The initiative fails to deliver promised benefits. And then, six months later, people are asking, "Why did we spend millions on this?"

Include in your budget: change management governance, user training (initial and ongoing), communications campaigns, process redesign, data migration support, post-launch stabilisation, and sustained capability development. These are essential to realising the value of your technology investment.

3. Planning With a Clean Slate Mentality

Budgets are typically planned as if the organisation exists in a vacuum. You identify your digitalisation initiatives, estimate their costs and timelines, and build your budget around the assumption that your team will deliver them all, on time, as planned.

But guess what? That rarely happens… because, in reality, organisations juggle competing priorities. There are urgent issues that suddenly become priorities and derail planned timelines. Key team members leave or are pulled onto crisis management or other business priorities take precedence because someone higher up says so. Your carefully balanced budget becomes a wish list rather than a realistic plan.

This is why most budget requests overcommit. Organisations bite off more than they can chew because they've planned in isolation, without accounting for the noise, complexity, and competing demands of running a business.

So what’s the right action to take? Be ultra-realistic at budget planning time. Assess your current capacity, look at historical delivery rates and factor in the reality that approximately 20-30% of available capacity typically goes to unplanned work and business-as-usual activities. Then, plan your digitalisation budget within the available capacity, not the theoretical maximum.

It's better to deliver 60% of your planned digitalisation initiatives successfully than to deliver 40% of everything and declare the remaining initiatives "delayed." Successful completion builds credibility and momentum; over-commitment and slippage erodes both.

4. Confusing Delivery With ROI

Here's a distinction that frustrates delivery teams and confuses senior stakeholders: delivering a budget and realising ROI are two different things.

A digitalisation initiative can be delivered on time and on budget, and still fail to deliver returns. Conversely, an initiative might take longer to deliver but deliver superior returns because the extra time was invested in adoption and value realisation.

Chris Williamson (a favourite interviewer / podcaster of mine) often discusses the concept of time and value, and how we often optimise for the wrong metrics. It’s perhaps something we do in the name of progress, but not in a bigger-picture sense. We celebrate project completion when we should be celebrating longer term value creation.

Most digital initiatives have a significant lag between delivery and returns. You go live with a new system, and for the first three to six months, productivity might actually dip as users adjust. The promised ROI arrives, if you're lucky, around month nine or twelve. If the ROI is rapid then it's probably not truly transformational, but rather just a business-as-usual improvement wrapped in digitalisation language.

Senior stakeholders need to understand this. When they approve a digitalisation budget, they're approving payment for a transformation that will deliver returns over 12-24 months, not approving payment for a delivered system. That's a very different commitment. Building this understanding upfront prevents the mid-delivery panic ("We've spent millions and haven't seen a penny of return yet") and keeps organisations focused on the long game.

5. Building With the Wrong Skills

Finally, a critical mistake that cascades through entire programmes: organisations assume their existing teams can deliver anything.

"We need a new customer platform built… let's use our software development team." "We need a new data platform… I'm sure the infrastructure guys can handle it." "We need a digital transformation… our IT operations team can take this on."

This inherently feels like a safe space to operate, financially, as you don’t have to incur extra costs from third parties to get the right person or team for the job, but what happened inevitably is that you end up jamming a square peg into a round hole. The job suffers, the team suffers, the ROI suffers and the budget still gets spent.

The principle is simple: build the right thing, and build the thing right. This requires two distinct but equally important capabilities. First, you need the right strategy skills, that is, the people who understand your business, your customers, and your market, and can define what digital transformation actually means for your organisation. Second, you need the right execution skills, i.e. the architects, engineers, data scientists, and delivery managers who can translate that strategy into working systems.

Most organisations underinvest in strategy and capability assessment upfront, then scramble to deliver with the wrong team composition resulting in initiatives that solve the wrong problems efficiently, or solve the right problems inefficiently.

Invest in assembling the right team. Sometimes this means bringing in external expertise. Sometimes it means significant upskilling. But skipping this step and assuming your existing team can “figure it out” is one of the most expensive mistakes you can make.

Moving Forward

Digitalisation budgets are large, complex, and high-stakes, with many of the failures due to budget allocation, planning and execution mistakes that are entirely preventable.

Review your current digitalisation budget against these five points. Are you measuring ROI? Are you funding adoption, not just build? Are you planning realistically? Do you distinguish between delivery and return? Do you have the right skills in place?

If you're uncertain about any of these questions, it's worth bringing in experienced guidance. At Skyo Digital, we help organisations design and deliver effective digitalisation programmes from strategy and capability assessment through implementation, adoption, and sustained value realisation. Whether you need support with budget planning, programme governance, change management, or end-to-end delivery, our team brings both strategic clarity and execution expertise.

Visit skyodigital.com/services to learn more about how we partner with organisations to deliver digitalisation that actually delivers returns.

Don't just spend your digitalisation budget. Deploy it strategically, manage it rigorously, and realise the value it was meant to create.