Lean Services with Item Hierarchies: What is the current status of GAEB?

Construction tenders in GAEB format are not possible with "Item Hierarchies", a new feature and data model from SAP, as we wrote in a blog post at the beginning of 2024. We have now implemented this exactly in our latest solution FUTURA Smart. What has changed? Hartmut Schwadtke, CEO of Futura Solutions, talks about this.

What is special about “Item Hierarchies” and what do they have to do with GAEB?

Hartmut Schwadtke: We are very familiar with the purchasing and processing of construction services. That is why we are also very familiar with GAEB as the standard for the structured request for quotations and the exchange of item lists in the construction industry. Until now, this could be mapped using the SAP module MM-SRV.

The "Item Hierarchies" are a new data model from SAP that was introduced with S/4HANA to map services, referred to here as "Lean Services", in a hierarchical structure. In the long term, they are intended to replace the MM-SRV module. In any case, with every S/4HANA implementation, SAP suggests that MM-SRV should no longer be set up, although this module is still supported under S/4HANA.    

A year ago, you noted that 'Lean Services with Item Hierarchies' is not an adequate replacement for MM-SRV. Is this still true?

Hartmut Schwadtke: Yes, that is still the case and will stay that way until SAP further develops its Item Hierarchies. Item Hierarchies are not a replacement for MM-SRV. While we are talking about almost complete GAEB compliance with MM-SRV, we can only achieve a certain GAEB compatibility with Item Hierarchies. This is due to some restrictions that are imposed when working with Item Hierarchies.

Futura Solutions has nevertheless developed a solution for mapping requests for construction projects using item hierarchies. Why?

Hartmut Schwadtke: Unlike SAP, we don't leave our customers out in the cold. We are squeezing every last drop of Item Hierarchies to be able to map GAEB-based requests for construction projects. Admittedly, the originators of GAEB would be surprised to hear “GAEB compatibility”, but what use is it when the common denominator of GAEB and Item Hierarchies is unfortunately so small.

What specific challenges does this involve?

Hartmut Schwadtke: There are some key restrictions that must be observed to ensure that an exchange via GAEB in FUTURA Smart will not run into a wall later. An example of this is the structuring of the item hierarchies: in S/4HANA, an item can be placed at any position of an outline level. However, to remain GAEB-compliant, the items must be placed at the lowest outline level.

Furthermore, S/4HANA does not recognize the ordinal number that is necessary for the exchange with suppliers. GAEB also recognizes different item types, but item hierarchies in S/4HANA only support the “normal item” – notice items, requirement items, alternative items, surcharge items, etc. cannot be mapped with it.

What about the division into “lots” that is common in the construction industry?

Hartmut Schwadtke: Unfortunately, this is no longer supported because it is not possible with item hierarchies. This is not only due to the maximum number of four title levels, but mainly because SAP does not provide a separate concept for lots. However, in the basic purchasing process, this is at least partially tolerable.

How does FUTURA Smart ensure that GAEB-compatible requests for quotation are possible?

Hartmut Schwadtke: FUTURA Smart offers two methods for this purpose: an Excel template, on the one hand, which companies can use to structure their data, and a GAEB interface, on the other hand, which enables the exchange in GAEB format.

However, we can manage the item types that are not covered by S/4HANA in FUTURA Smart. If, for example, a requirement item is “used”, FUTURA Smart converts this item into a normal item so that it can be transferred to S/4HANA. This makes it possible to manage requests for construction projects in S/4HANA despite the SAP-related restrictions.

What about the other SAP sourcing applications?

Hartmut Schwadtke:When looking at the item hierarchies of SAP, one is surprised
that SAP Ariba still cannot handle such structures. Because: Item Hierarchies and
SAP Ariba, that doesn't work. SAP implementation partners have confirmed that
FUTURA Smart is actually the only e-sourcing solution on the market that supports
item hierarchies and can also process GAEB. So here we have a truly unique selling
point   

Who should be using Item Hierarchies?

Hartmut Schwadtke: Companies that issue requests for construction projects and
use S/4HANA or plan to do so should rely on MM-SRV for as long as possible, as
long as it is still supported by SAP.

For companies that operate internationally and only occasionally issue requests for
construction projects, the modern data model of lean services with item hierarchies
can be a timely option, despite the limitations described.

How does FUTURA Smart fit into this context?

Hartmut Schwadtke: We are responding to SAP's product strategy and at the same time using the new interface technology of S/4HANA, i.e. OData Services and REST Services. FUTURA Smart is based on a microservices architecture in Azure Kubernetes Service (AKS) and thus meets the latest technology standards. In combination with S/4HANA, FUTURA Smart is therefore perfectly positioned for the future.

Thank you for the interview.

More on the topic:
How SAP S/4HANA is changing sourcing with lean services and item hierarchies - and why FUTURA Smart is the key building block for construction tenders:
Sourcingwith SAP S/4HANA: What item hierarchies do - and don't do