ATSA Architects Case Study

UNIVERSITY OF MALAYA FACULTY OF BUILT ENVIRONMENT DEPARTMENT OF ARCHITECTURE Semester 2, Session 2012/2013 [ Assignment 01 ] SETTING UP & OPERATING AN ARCHITECTURAL PRACTICE OFFICE: Case study: ATSA Architects Sdn. Bhd. Lecturer: Ar. Zaini Mufti Prepared by: NORLIANA YASMIN BT. MUHAMMAD NASIR BES110025

BAEE4253 Professional Practice III 1 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) 1.0 Background Founded in 1992 by its founding members; Ar. Azim A. Aziz and Ar. Zulqaisar Hamidin, ATSA Architects is now a multiple award winning architecture firm and has been awarded as the top ten architectural practices in Malaysia by BCI Asia. ATSA is also a certified MS ISO 9001:2008 company; it has upgraded its certification to QESH Management System, programmed to qualify and meet the quality standards for ISO 14001 and OHSAS 18001 requirements. Over the past 20 years, ATSA Architects have grown in terms of capacity from 4 key personnel which consist of its two founding members Azim and Zulqaisar, Yee Teck Choon as Senior Architect and Paul Lau as Director to approximately 80 employees with offices in Penang, Johor, Kota Kinabalu, Kuching and two other operation offices in Bintulu and Sandakan. 2.0 Philosophy: “ATSA Architects believes in its brand of Architecture that is Responsible, Timeless, Progressive, Innovative and Sustainable. Our responsibility to the public, to the client, to future generations, to the environment and to ourselves is paramount. We inscribe timeless, progression and innovation into our designs and sustainability as our design aesthetics. Architect - Client Partnership, the Past Inspires the Future, Local - International Approach, Thought Leadership, High Quality Competitive Sustainable Designs” – Source: ATSA Architects official website 3.0 Topics: 1. Defining factor which leads to the decision to embark on the business It all began around the year 1965 where Ar. Azim’s late father, Tan Sri Aziz was working with Dato Ar. Baharuddin Kassim (the 2009 PAM Gold Award recipient known for pioneering progressive designs inspired by local heritage and the man behind some of the country’s most symbolic buildings that include the National Mosque in KL, Selangor State Museum and many skyscrapers in the city) as a social worker. Ar. Azim has been exposed with lots of architectural works since he was a child. In the early 70s when he was about seven to eight years old, where the whole nation was widely developing and building construction was rapidly blooming due to the independence gained by the country, he started to like architecture (about to be passionate about it). 15 years later he enrolled architecture and successfully graduated five years later. Along the journey, he has started to enjoy and be very passionate about architecture and that was how he embarked on the business. Just before graduating, one of his lecturers asked about his five years plan after graduating and his answer was to set up his own architectural firm. As planned, he joined Dato Ar. Baharuddin right after he graduated to gain as much knowledge and information as he can. Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III 2 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) On the fourth year working with Dato Ar. Baharuddin, he passed his LAM Part 3 Professional examination and one year later he formed ATSA Architects Sdn Bhd with two other partners, Ar. Zulqaisar and Mr. Yee Teck Choon. 2. Strategies in obtaining capital to start the business Initially, at the age of 27 when he was fully ready to setup an architectural firm, which means that he had obtained Part 3, five years of working experience and few projects in his hands, he then applied for MARA loan. Unfortunately it was turned down just because he was too young for such an application. The loan officer then asked him to come again when he reach certain allowable age to apply for the loan. Giving up was not an option. Ar. Azim tried other methods to obtain the capital to start the business. So he then started the business with RM10K which he loaned from his late mother plus RM6K more from total of his own savings plus the other two partners’. The total initial capital was only RM16k which they use to pay the space that they rent (a space with only four tables in someone else’s office at Taman Tun Dr. Ismail), stationeries, equipment for design and manual drafting, transportation, etc. At that time they managed to use initial capital optimally as they did not have any staff to pay for. All the jobs including design, manual drafting, secretarial work, administrating, etc. were done by only the three of them. Only six months later that they could take their first salary. Now, after 21 years of establishment, ATSA Achitects have approximately 80 employees with offices in Penang, Kota Kinabalu, Kuching, Johor and two other operation offices in Bintulu and Sandakan. 3. Strategies in securing jobs (Initial years till now) In the initial years, the four key personnels started with very small projects such as house renovation and residential projects. They knocked on doors, met people who gave chances and sponsors as well as write out letters in order to find jobs. Not very long later they managed to find stabled clients who have a lot of development projects such as Celcom Berhad. Celcom was impressed with the commitments and works that they have done and since then Celcom kept giving their other subsequent development projects to ATSA Achitects. Now ATSA Architects is having many more big clients such as Sime Darby, TH Properties Sdn. Bhd., Putrajaya Holdings Bhd., Bumiputra Commerce (CIMB), Glenmarie Properties, Southkey properties Sdn Bhd, Yayasan Al Bukhari and many more that ensures the continuity of jobs. Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III 3 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) 4. Most important factor to maintain harmonious relationship between directors Having survived in the business of architecture for over 20 years, which is longer than other architectural firms in Malaysia, Ar. Azim found out that having good partners are one of the key to success. It has been 26 years of experience working together since they first started work in Jurubena Bertiga. Each of them appreciates the hardship through thick and thin all these years. Struggle together and keep faith in each other even during economic meltdown which leads to recession in 1997. Above all, they realize that the one objective is to embrace the enjoyment of working and producing work of architecture. Good combination of specialties and strengths of each person (as in Ar. Azim: Management, Ar. Zulqaisar: Design and Ar. Yee: Technical and financial matters) helps a lot in running projects. So they keep good friendship and learn to accept each other’s character. 5. Pros and cons between sole proprietor vs. partnership/body corporate Types of Practice Pros Cons Sole Proprietor • Profits need not to be shared • One man show as an – limited Partnership • unincorporated entity ability to do job Body Corporate • Limited skills • Low financial strength and could not handle many big projects • unincorporated entity • Liability – if one dissolves, the other partner is also affected. Partners are generally ‘jointly and severally liable’ for the full financial obligations of the partnership, regardless of each partner’s share of financial interest in the firm. • legal structure - unlike a - proprietorship or a partnership, the personal assets of the shareholders generally cannot be reached to satisfy the liabilities or obligations of the company • Fastest and easiest • Follow rules and regulations to manage company (AGM, tax, etc) • Easier accounting purposes (insurance, purchase cars etc.) Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III 4 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) 6. Most challenging problem in running an office Most challenging problem in ATSA would be managing human resource. The challenge is to ensure ATSA get as well as maintain good and talented staff which can contribute to the company without turning over. Efficiency of staff and continuity of projects would be part of the determining factor to the cash flow in the business. Ar. Azim agrees with what Frank Lloyd Wright has written in his book stating “…the hardest problem in the business of architecture is to get a project, and the second hardest problem is to get the next project…” The business of architecture now has become more competitive and challenging as there are more new architects produced each year and when clients have increase expectation of architects work outcome. Other challenges would be the office management where being able to sustain the business for over 20 years means a lot of works has been generated thus the needs to keep records, filing and documentation are essential. Now, generally ATSA is getting two new proposals each week which makes a rough total of nearly one hundred proposals a year. Thus, a good work management is really essential. Figure 1: 2011 news archives on QESH certification Source: http://www.atsa.com.my/eNews_archives/2011/eNews%20Archive%202011%20-%2006.html Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III 5 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) 7. Organizational structure The organizational structure of ATSA Architects is one part of QESH (Quality, Environment, Safety & Health), thus the teams (design, project, management, etc.) must be organized to keep to certain standard where it is audited every few years. This is also to ensure that the organization is well structured in a long run. (Refer Appendix A – ATSA Organizational Chart) 8. Branding & placement in industry Branding: The branding and marketing strategies to its services are gathered in ATSA’s official website, online video (youtube), news updates, hard print such as folios and brochures as well as various architectural competition (be it local or international), lecture and talk. Green Building is also very much part of ATSA’s work and promotion. ATSA is also partnering with a leading architectural firm in India to collaborate on work that needs additional studies on Green matters, such as climatic modeling and simulation. The advantage of this international collaboration with them is that ATSA gets to extend their services to their clients in which to include LEED (Leadership in Energy and Environmental Design) certifications. Figure 2: News archive (“The Malay Mail – Friday July 20 2012”) Source: http://www.atsa.com.my/eNews_archives/2012/eNews%20Archive%202012%20-%2002.html Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III 6 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) ATSA has also subscribed to Architecture 2030 as part of their long term plan, vision and goals. Architecture 2030, a non-profit, non-partisan and independent organization, was established in response to the climate change crisis by architect Edward Mazria in 2002. 2030’s mission is to rapidly transform the global Building Sector from the major contributor of greenhouse gas emissions to a central part of the solution to the climate change, energy consumption, and economic crises. The goal of Architecture 2030 is to achieve a dramatic reduction in the climate-change-causing greenhouse gas (GHG) emissions of the Building Sector by changing the way buildings and developments are planned, designed and constructed. Placement in the industry: In 2012, ATSA Architects was awarded the Top 10 architectural firms in Malaysia by BCI Asia. The award is to honor the top architectural firms and developers that had the impact on the built environment across seven major cities in Southeast Asia. For ATSA Architects, it is surely has been both encouraging and gratifying to have received this prestigious award. This honor indicates a promising future for ATSA to continuously take great pride in delivering superior designs and architectural solutions to its clients. Previously, ATSA Architects had also received the Top Ten BCI Awards in 2005 and 2008. 9. Sustainability of firm and succession planning Sustainability of firm: To sustain the firm as well as the work, firstly it is important to maintain the right sizing of the organization (i.e to be able to control the human resource) to meet its objectives. Secondly is to plan the office for sudden drop or change due to the change in the internal or external environment factor such as economic breakdown, unstable political scenario, change in client’s behavior and needs, etc. Thirdly, is to get repeat client such as Sime Darby, Putrajaya Holdings Bhd., Bumiputra Commerce (CIMB), etc who have a lot of development projects. When an architectural firm performs well, definitely it is easier to get the next project from such clients. Succession planning: “There are several ways or formulas to work on the succession plan. As Architects we are all in a unique position as our products are based much more on creativity and talent, and not on machinery. Whoever is to take over the company must have the traits to carry out the various tasks. The main concerns with Architects, both old and young are that, for the older Architects is about letting go of what they had built over the many years and to protect their legacy, and for the younger generation is that they prefer to start from scratch to prove themselves and build a name for themselves. Although this may change in years to come, as it has become Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III 7 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) build a name for themselves. Although this may change in years to come, as it has become difficult to set up one own firm and flourish, no matter talented and capable they are. However, we know, for ATSA, we have to create a formula or devise a scheme to facilitate a good succession plan. In absence of a proper succession plan, some bosses, prefer their children or close relatives to take over the realm and to carry through the name. Many, however failed to devise a good succession plans and will end up having to close down or give away their firms lot, stock and barrel without a plan to carry through their vision when they set up. The best way, I believe is to consult experts on the matter and to devise a plan. We have yet to do so and will have to do that soon. Fortunately, we may have 20 years or more (God willing) before we retire and to come with a plan to identify the next generation.” – Ar. Azim 10. Proportion of jobs: private vs. government Percentage of works 4.4% 5.6% Government Private Figure 3: Proportion on types of jobs The percentage of works between private and government projects are almost balance. Architects usually gets good pay with government projects but have to deal with the slow work progression problem. While for private projects, they are usually fast track and would finish faster. It is good to have balance of both private and government projects to sustain the office. 11. Services and Percentage of works The main services include: Architecture Master Planning Project Management Sustainable Design Interior Design Landscape Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III 8 Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) Architectural Works 4% 2% 2% 6% Residential and Commercial 6% Education Centres 46% Master plan 5% Life Sciences buildings Contemporary Islamic buildings 4% 20% 5% Government Institutional buildings Hospitality and Resort buildings Figure 4: Percentage of Architectural Works 12. Advice to aspiring practitioners “My personal views on Architecture are that, architects who wish to set up Architectural firms in Malaysia will face challenges in future due to competition, not only Malaysian architects, but also foreign architects setting up their offices. It is already happening now. The best way to survive a newly set up firms in future is to learn to equip ourselves (to be able, capable and passionate) by partnering with others. The days of having sole proprietorship may not be feasible or sustainable any more to carry out substantial or lucrative works. The next would be, Architectural firms of the future will be Multi discipline firms encompassing Engineering, Quantity surveying, Sustainability, Building information modeling, etc, either as one single entity or in a lose association with each other. Some may hire specialist to carry various tasks on job to job basis.” – Ar. Azim Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

Appendix A – ATSA Organizational Structure

BAEE4253 Professional Practice III A Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd

BAEE4253 Professional Practice III B Semester 2 | session 2012/2013 Norliana Yasmin bt Muhammad Nasir (BES110025) Appendix B Figure B1: The interviewee, Ar. Azim Tan Sri Aziz (CEO of ATSA Architects) Figure B2: Design department (second floor) Figure B3: Stairs going up to the Figure B4: Discussion area next to production area (first floor) directors' rooms Setting up & operating an Architectural Practice Office Case Study: ATSA Architects Sdn. Bhd