Despite their combat and magic strength, Undead have some important flaws to keep in mind.
Undead are slow. Even their fastest units pale in comparison to any other faction, so they need magic support or additional units from another faction to augment their low maneuvers.
With no access to missile results, mid-terrain faces with missile icons are "dead zones" (no pun intended) where Undead can do little more than twiddle their thumbs.
Being comprised only of Death magic, they are unable to access many powerful effects found in other colors, such as Transmute Rock to Mud, Fiery Weapon, and Flash Flood. Furthermore, this often leads to the unfortunate use of black dragons and black Dragonkin, which means the Dragonkin can't be used to defend against the dragons.
Relatively low saves on most units requires some extra work, such as Open Grave or careful damage distribution to take full advantage of Stepped Damage.
No missile units means all combat is head-to-head with no safe distance.