Every year I sit in budget conversations with business owners, and every year I watch the same software budget mistakes repeat. Not because these owners are careless. They are usually sharp people who are simply guessing in a domain they were never trained in. Software spend has its own traps, and they are not obvious from the outside.
Looking back at 2022, four mistakes did the most damage across the companies I worked with. Each one is avoidable. Each one has a fix I have already written about somewhere on this site, because these are patterns, not one-off accidents.
If you are drafting next year's numbers right now, read this first. It will save you more than it costs you to read.
Mistake 1: No Line Item for Maintenance
This is the big one. Owners budget for building the software and forget that software is not a building. It is a garden. It needs ongoing care or it rots.
I have watched companies spend 80 million rupiah on a custom system, celebrate the launch, allocate zero for the following year, and then act shocked when it breaks, needs a security patch, or requires a change six months later. Now the fix is an emergency, which means it is expensive and rushed.
The rule I give clients: budget 15 to 20 percent of the build cost, every year, for maintenance and small improvements. Put it in writing before the project starts. A system with no maintenance line is not saving you money, it is deferring a bigger bill to a worse time. I lay out the full framework for this in why your business needs a technology strategy, not just a website.
Mistake 2: Tool Sprawl Nobody Is Watching
Software-as-a-service made it easy to add one more tool. And another. And another. By the end of 2022, several clients discovered they were paying monthly for subscriptions nobody remembered signing up for.
One distribution company I audited was spending roughly 6 million rupiah a month across fourteen different tools. When we listed them out, three were duplicates that did the same job, two had not been logged into in five months, and one was billing for forty user seats when they had eleven employees.
The fix is embarrassingly simple and almost nobody does it:
- Once a quarter, export every recurring software charge.
- Next to each, write who uses it and what it does.
- Cancel anything you cannot justify in one sentence.
That single audit paid for itself many times over. Sprawl does not announce itself. You have to go looking.
Mistake 3: Cheapest-Vendor Roulette
I understand the instinct. Two vendors quote the same project, one is 40 percent cheaper, you pick the cheaper one. It feels like discipline. Often it is a gamble you did not know you were placing.
The cheap quote usually gets there by cutting the things you cannot see: testing, documentation, proper handover, and a maintainable codebase. You save money on day one and pay it back with interest when the vendor disappears, the code is a mess nobody else can touch, and you are locked in.
I am not saying pay the most. I am saying compare what is actually in the box. Ask each vendor: do I own the source code, will it be documented, and can another team pick it up if you vanish? A slightly higher quote that answers yes to all three is almost always cheaper over three years. This is the whole argument behind vendor exit planning: own your code and your data.
Mistake 4: The Big-Bang Bet
The fourth mistake is scope. Owners get excited and try to build the entire dream system in one giant project. Twelve months, one huge payment, everything at once.
Big-bang projects fail more often than they succeed, and when they fail they fail expensively. The requirements drift over a year, the business changes underneath the project, and by launch the thing solves last year's problem. I have seen a family manufacturer nearly do this before we broke it into pieces, a story I told in a family manufacturer escaped its spreadsheet chaos.
The fix is to spend in stages. Build the one module that hurts most. Ship it. Confirm people actually use it. Then fund the next piece from a position of proof, not hope. Your budget should read like a series of small bets, not one enormous one.
A Simple Budget Sanity Check
Before you finalize next year's software budget, run each line through four questions:
| Question | If the answer is no |
|---|---|
| Did I include maintenance? | Add 15 to 20 percent of build cost |
| Have I audited existing subscriptions? | Do it before adding anything new |
| Do I own and understand what I am paying for? | Renegotiate the terms |
| Am I spending in stages, not one bet? | Break the project into phases |
If any answer is no, you have found next year's problem before it found you.
The Takeaway
Software budget mistakes are rarely about the numbers being too small. They are about the numbers being in the wrong shape: no maintenance, hidden sprawl, false economy, and oversized bets.
Fix the shape and the amount usually takes care of itself. Budget for care, not just creation. Audit what you already pay. Buy ownership, not just the lowest price. And spend in steps you can stop.
Do that, and 2023 will cost you less and deliver more than 2022 did. That is the entire point of a budget.