I agree that the western countries and their allies were caught unprepared. And it's primarily because they probably thought it was unimaginable for Russia to invade Ukraine. To take a contested territory would be possible but to invade the entire country was perhaps out of their minds. This is the modern era, after all. They probably failed in their assessment of Putin. They simply underestimated his madness.

On Russia's side, however, I also don't think they were prepared. They definitely underestimated Ukraine and its defense capabilities. They overestimated their troops' capabilities. They underestimated the allies' reaction. If they were preparing for this war for the last decade or so, they should have pulled out their huge sums of money from European banks prior to the attack. They should already have detached themselves from SWIFT. They should have established much stronger markets outside the enemies' territories. Their oligarchs should have already been warned earlier of the possible sanctions.