Item Hierarchies in SAP S/4HANA: Structure yes. Requests for quotation no?

SAP has introduced Lean Services with SAP S/4HANA – as a modern, streamlined alternative to the classic MM-SRV. This concept is complemented by Item Hierarchies, which allow multi-level item lists to be mapped directly in SAP for the first time – clearly, in a structured way and with up to four hierarchy levels.

But the benefits end where the process should begin: with the integration of suppliers. This is because SAP Ariba, SAP's own sourcing solution, does not support item lists or multi-level structures. This article explains how you can still fully exploit the potential – and why FUTURA Smart is currently the only solution that consistently supports Item Hierarchies.

Item Hierarchies – Good structure, but no process?

Item hierarchies are closely linked to the Lean Services that SAP has established with S/4HANA as a simplified alternative to the classic MM-SRV (Material Management Service Procurement). In addition to Lean Services for easy management of service items, S/4HANA 2022 introduced Item Hierarchies: a building block that enables the multi-level structuring of requirements in SAP for the first time – with up to four hierarchy levels.

The goal: to avoid flat material lists and to create clearer, more structured requests for quotation via SAP. However, only a few SAP customers have taken advantage of this potential. Why? Because the right e-sourcing solution is missing: SAP Ariba, the in-house sourcing solution, does not support multi-level structures or item lists.

In practice, this means that complex structural requests for quotation can be set up in S/4HANA – but suppliers cannot be integrated to process them and submit their quotations. Without a suitable e-sourcing solution, the SAP portfolio remains a dead end in terms of item hierarchies.

Possible uses of Item Hierarchies

Whether construction project, machinery or facility services: Item Hierarchies bring structure to complex procurement processes – across many industries. The hierarchical display of demands makes it possible to systematically group and clearly organize different services.

These operational areas will benefit in particular:

🔨 Construction & infrastructure

• Requests for quotation for construction projects with partial services (shell construction, finishing, technology, etc.)
• Item lists with multiple levels (trades, items)

⚙️ Plant construction & mechanical engineering

• Projects with mechanical, electrical and software components
• Subsystems or modules as separate packages in a request for quotation
• Combination of materials and services (e. g. commissioning)

🚚 Transportation & logistics

• Requests for quotation with multiple delivery locations and time frames
• Variants of packaging, means of transportation or transportation conditions
• Service bundles such as "delivery + assembly + return"

🏭 Industry & major projects

• Framework contracts or requests for quotations covering several years/locations
• Structuring by business units or plants
• Combination of product deliveries and project-related services

🏢 Facility Management & Services

• Services by region, building or service type (e. g. cleaning, maintenance)
• Graduated prices or variable services for the duration of the contract
• Recurring services with target/actual comparison

From MM-SRV to Item Hierarchies – What does this mean for fequests for construction projects?

In Germany, e-sourcing in the construction industry is closely linked to the GAEB standard. This is precisely where the limitations of Item Hierarchies become particularly evident –  especially in comparison to the previous SAP module MM-SRV (Material Management Service Procurement).

MM-SRV enabled the mapping of multi-level item lists and was therefore the SAP solution for GAEB-compliant requests for construction projects for many years. However, with the migration to SAP S/4HANA, many companies are deciding to do without MM-SRV – not least because SAP plans to replace this module in the future.

As a result, companies are resorting to Lean Services and Item Hierarchies. However, this combination only allows for a so-called “Lean GAEB” – a simplified, restricted form of the GAEB-based request for quotations.

This is precisely where FUTURA Smart comes in: The solution is currently the only fully integrated platform that can actually exploit the potential of Item Hierarchies and Lean Services in the construction business – including GAEB integration and an end-to-end supplier integration.

Even if this use is associated with functional limitations, it still represents a practical and economically viable solution for SAP customers to implement structured construction tenders directly from SAP S/4HANA.

Item Hierarchies in practice: This is how to implement them in construction projects

FUTURA Smart maps Item Hierarchies and transfers them into a seamlessly digitized process with S/4HANA – and that is exactly what is essential in construction projects. But the solution excels in other scenarios with complex demand structures as well.

SAP Ariba does not support Item Hierarchies – so if you want to map structured requests for quotation in the SAP system, you need a sourcing solution that can do just that. FUTURA Smart is currently the only one.

👉 The process with FUTURA Smart in practice:

• Extracting data from S/4HANA: Lean Services with Item Hierarchies can be extracted and processed in a structured manner.
• Importing data via Excel or GAEB XML: Companies can import data in GAEB format to efficiently create standardized requests for quotation.
• Automated transfer to SAP: After the request for quotation, purchase orders or contracts can be automatically placed in S/4HANA using the structure in accordance with the Item Hierarchies.

Anyone who also requires complete GAEB integration, including measurement and service feedback, can rely on FUTURA Engineering - the solution specifically designed for construction and service procurement.

Conclusion: Structure alone is not enough – FUTURA Smart makes Item Hierarchies usable in the sourcing process

SAP provides the basis for structured requests for quotation with its Item Hierarchies. However, without the appropriate e-sourcing solution, the benefits are limited. FUTURA Smart closes this gap – with end-to-end GAEB integration, supplier onboarding and full support for structured requests for quotation in SAP S/4HANA.

More on the topic:
Read more about GAEB compatibility and how FUTURA Smart closes the gap in the interview with Hartmut Schwadtke.