RGRU: The Prospects for Software Import Substitution

2026-04-17 11:37

Dependence on foreign solutions remains strong in many industries. Import substitution is progressing more slowly in sectors that rely on Enterprise Resource Planning (ERP) systems.

Eduard Dolgalev, Director of Strategic Development in the CIS at Selecty:

«ERP systems are software solutions that do not just serve individual functions, but cover the entire chain of a company’s business processes, from finance and logistics to HR, sales and procurement. This requires deep market analysis and a strong understanding of production processes and business operations, which is why Russian platforms have little chance of competing head-to-head in the ERP segment».

Historically, strong foreign systems have sold not just automation, but process optimisation. Vendors analyse workflows in similar businesses around the world and incorporate best practices into their products.

Eduard Dolgalev, Director of Strategic Development in the CIS at Selecty:

«For example, they may show a client a case study of a similar operation in South America where revenue is 20% higher. The client understands the target model, methodology and expected economic effect in advance. In the local context, a different approach is often needed: if radical restructuring is required, the company has to draw up its own roadmap, take on the risk of uncertainty, and invest more time in design, hypothesis testing and team preparation. This is an expensive solution with an uncertain outcome».

Since 2022, open-source software has advanced significantly, with many projects reaching a commercial level of maturity. The gap between open-source and proprietary solutions is often estimated at 20–30% in terms of functionality and ease of use. If every percentage point of revenue matters, that may favour the purchase of commercial software. However, more and more businesses are solving problems with open-source solutions, especially where flexibility and total cost of ownership matter most.

Import substitution is moving faster in areas supported by direct state measures and strong regulatory oversight, including national operating systems, office software, solutions for government customers, and highly regulated sectors such as finance and energy. Progress is noticeably slower in areas such as hardware and high-tech equipment.

Eduard Dolgalev, Director of Strategic Development in the CIS at Selecty:

«The main risk remains in products that simply replicate the functionality of Western counterparts. If global vendors return, price cuts of up to 90% on product lines that were previously popular in Russia are possible, and such a policy could continue for several years. For companies without a clearly differentiated value proposition, this could effectively lead to exhaustion of resources».

If foreign companies return to the Russian market, another possible scenario would be for them to buy up Russian software, use it sparingly, or simply shelve it to eliminate a competitor. That might formally raise the profile of local brands, but in the end, users are likely to choose a higher-quality global product.