SECURITIES AND EXCHANGE COMMISSION   
                        Washington, DC 20549   

                               Form 10-Q   

(Mark One)   
 /X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities   
Exchange Act of 1934 for the quarterly period ended June 30, 1998 
or   

 / / Transition report pursuant to Section 13 or 15(d) of the Securities   
Exchange Act of 1934 for the transition period from _______ to _______ .   


                                0-11521   
                       (Commission File Number)   
    

               SYSTEMS & COMPUTER TECHNOLOGY CORPORATION   
        (Exact name of registrant as specified in its charter)   


                Delaware                          23-1701520   
      (State or other jurisdiction            (I.R.S.  Employer   
           of incorporation)                  Identification No.)   


                     Great Valley Corporate Center   
                          4 Country View Road   
                     Malvern, Pennsylvania 19355   
               (Address of principal executive offices)   
   

Registrant's telephone number, including area code: (610) 647-5930   


   
Indicate by check mark whether the registrant (1) has filed all reports   
required to be filed by Section 13 or 15(d) of the Securities Exchange Act   
of 1934 during the preceding 12 months (or for such shorter period that the   
registrant was required to file such reports), and (2) has been subject to   
such filing requirements for the past 90 days.  Yes /X/ No / /  


Indicate the number of shares outstanding of each of the issuer's   
classes of common stock, as of the latest practicable date.   
        
33,964,946 Common shares, $.01 par value, as of August 6, 1998  
      


               Page 1 of 21 consecutively numbered pages   





<PAGE> 


SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES  

INDEX   


PART I, UNAUDITED FINANCIAL INFORMATION  
      
   Item 1.  Financial Statements   
   
     Condensed Consolidated Balance Sheets -   
        June 30, 1998 and September 30, 1997   

     Condensed Consolidated Statements of Operations -   
        Three Months Ended June 30, 1998 and 1997 

     Condensed Consolidated Statements of Operations -   
        Nine Months Ended June 30, 1998 and 1997 

     Condensed Consolidated Statements of Cash Flows -   
        Nine Months Ended June 30, 1998 and 1997   

     Notes to Condensed Consolidated Financial Statements   


   Item 2.  Management's Discussion and Analysis of   
     Operations and Financial Condition   
   

PART II, OTHER INFORMATION   
      
   Item 1.  Legal Proceedings 

   Item 5.  Other Information  

   Item 6.  Exhibits and Reports on Form 8-K   

SIGNATURES   





<PAGE> 

















SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS   
(in thousands, except per share amounts)   


                                               June 30,      September 30, 
                                                 1998            1997   
                                             (UNAUDITED)        (NOTE)   

ASSETS   

CURRENT ASSETS   
   Cash and cash equivalents                   $ 11,332        $ 29,809 
   Short-term investments, including  
      accrued interest of $1,266                 76,711              -- 
   Receivables, including $69,545   
      and $59,311 of earned revenues   
      in excess of billings, net of   
      allowance for doubtful accounts   
      of $4,023 and $4,098                      132,990         100,543 
   Prepaid expenses and other receivables        12,078           8,473   
                                               --------        --------   
              TOTAL CURRENT ASSETS              233,111         138,825   
                  
PROPERTY AND EQUIPMENT--net of   
   accumulated depreciation                      48,360          40,710 
                  
CAPITALIZED COMPUTER SOFTWARE COSTS,   
   net of accumulated amortization               16,982          15,167 
                  
COST IN EXCESS OF FAIR VALUE OF NET   
   ASSETS ACQUIRED, net of accumulated   
   amortization                                   7,590           8,121 
                  
OTHER ASSETS AND DEFERRED CHARGES                 9,161           6,881   
                                               --------        --------   
TOTAL ASSETS                                   $315,204        $209,704   
                                               ========        ========   







<PAGE> 







   
   
   




SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS   
(in thousands, except per share amounts)   
   

                                               June 30,    September 30, 
                                                 1998            1997   
                                             (UNAUDITED)        (NOTE)   

LIABILITIES & STOCKHOLDERS' EQUITY   
   
CURRENT LIABILITIES   
   Accounts payable                            $  9,345        $ 10,023   
   Current portion of long-term debt                740           1,225   
   Income taxes payable                           6,823           5,000   
   Accrued expenses                              25,890          22,649   
   Deferred revenue                              13,080          16,711   
                                               --------        --------   
              TOTAL CURRENT LIABILITIES          55,878          55,608 

LONG-TERM DEBT, less current portion             78,414           2,549 
DEFERRED TAXES AND OTHER    
   LONG-TERM LIABILITIES                          1,241           1,122 
                  
STOCKHOLDERS' EQUITY   
   Preferred stock, par value $.10 per   
      share--authorized 3,000 shares,   
      none issued   
   Common stock, par value $.01 per share--   
      authorized 100,000 shares, issued   
      36,222 and 35,146 shares                      362             352   
   Capital in excess of par value                97,117          91,064   
   Retained earnings                             85,761          62,578   
                                               --------        --------   
                                                183,240         153,994   
Less   
   Held in treasury, 2,302 common   
      shares--at cost                            (2,959)         (2,959)   
   Notes receivable from stockholders              (610)           (610)   
                                               --------        --------   
                                                179,671         150,425   
                                               --------        --------   
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $315,204        $209,704   
                                               ========        ========   





Note: The condensed consolidated balance sheet at September 30, 1997 has   
been derived from the audited financial statements at that date.   

See notes to condensed consolidated financial statements.  



<PAGE> 



SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES   
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (UNAUDITED)   
(in thousands, except per share amounts)   
   

                                              For the Three Months Ended   
                                                         June 30,   
                                                  1998            1997   

Revenues:   
 Outsourcing services                          $ 32,846         $24,715   
 Software sales                                  25,353          20,460  
 Maintenance and enhancements                    16,011          12,602   
 Software services                               29,692          17,156   
 Interest and other revenue                       1,138             161   
                                               --------         -------   
                                                105,040          75,094   

Expenses:   
 Cost of outsourcing services                    26,331          20,056   
 Cost of software sales and   
    maintenance and enhancements                 17,372          11,556  
 Cost of software services                       20,482          14,199  
 Selling, general and administrative             23,807          18,608   
 Interest expense                                 1,057               0   
                                               --------         -------   
                                                 89,049          64,419   

Income before income taxes                       15,991          10,675   

Provision for income taxes                        6,554           4,270   
                                               --------         -------  
   
Net income                                      $ 9,437         $ 6,405   
                                               ========         =======   
   
Per common share:   
Net income   
   Earnings per common share                     $ 0.28          $ 0.21   
   Earnings per share assuming dilution          $ 0.26          $ 0.19 
Common shares and equivalents outstanding  
   Common shares                                 33,718          31,080   
   Common shares - assuming dilution             39,185          34,302 





See notes to condensed consolidated financial statements.   






<PAGE> 




SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES   
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (UNAUDITED)   
(in thousands, except per share amounts)   
   

                                              For the Nine Months Ended   
                                                        June 30,   
                                                  1998            1997 

Revenues:   
 Outsourcing services                          $ 91,112        $ 70,149   
 Software sales                                  69,653          50,554  
 Maintenance and enhancements                    46,669          38,003  
 Software services                               76,658          43,899   
 Interest and other revenue                       4,313             406   
                                               --------        --------   
                                                288,405         203,011 

Expenses:   
 Cost of outsourcing services                    73,801          57,190 
 Cost of software sales and   
    maintenance and enhancements                 50,082          33,063 
 Cost of software services                       54,607          36,150 
 Selling, general and administrative             67,744          51,064 
 Interest expense                                 2,932           1,123 
                                               --------        --------   
                                                249,166         178,590 

Income before income taxes                       39,239          24,421 

Provision for income taxes                       16,056           9,906 
                                               --------        -------- 
   
Net income                                     $ 23,183        $ 14,515 
                                               ========        ======== 
   
Per common share:   
Net income   
   Earnings per common share                     $ 0.69          $ 0.50   
   Earnings per share assuming dilution          $ 0.64          $ 0.45   
Common shares and equivalents outstanding    
   Common shares                                 33,388          29,104   
   Common shares - assuming dilution             38,627          33,692   




See notes to condensed consolidated financial statements.   






<PAGE> 





SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES   
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)   
(in thousands)   
                                               For the Nine Months Ended 
                                                        June 30,   
                                                  1998            1997  
OPERATING ACTIVITIES   
Net income                                     $ 23,183        $ 14,515  
Adjustments to reconcile net income to  
   net cash provided by operating    
   activities:   
   Depreciation and amortization                 12,259           9,527 
   Provision for doubtful accounts                1,788           1,732 
   Changes in operating assets and   
      liabilities:   
      (Increase) in receivables                 (34,235)        (26,745) 
      (Increase) in interest receivable          (1,266)             --  
      (Increase) in other current 
         assets                                  (3,605)         (2,970) 
      Increase in other accrued expenses   
         and liabilities                          3,241          11,299 
      (Decrease) in deferred revenue             (3,862)         (2,602) 
      Other, net                                   (917)            620 
                                               ---------        --------  
NET CASH (USED IN) PROVIDED BY 
   OPERATING ACTIVITIES                          (3,414)          5,376 
   
INVESTING ACTIVITIES   
Purchase of property and equipment              (13,190)         (7,297) 
Capitalized computer software costs              (5,917)         (5,633) 
Purchase of investments   
   available-for-sale                          (147,978)             --   
Proceeds from sale or maturity of   
   investments available-for-sale                72,799              -- 
                                               ---------       ---------  
NET CASH USED IN INVESTING ACTIVITIES           (94,286)        (12,930) 

FINANCING ACTIVITIES  
Principal payments on short-term debt            (1,225)         (1,700)   
Proceeds from borrowings, net of  
   issuance costs                                74,182           7,700    
Repurchase and retirement of Company stock           --          (1,271)   
Proceeds from exercise of stock options           6,266           1,330 
Redemption of subordinated debentures 
   not converted                                      --            (58) 
                                               ---------       ---------   
NET CASH PROVIDED BY FINANCING ACTIVITIES        79,223           6,001 

(DECREASE) IN CASH & CASH EQUIVALENTS           (18,477)         (1,553) 
CASH & CASH EQUIVALENTS-BEGINNING OF PERIOD      29,809          12,303 
                                               ---------       ---------   
CASH & CASH EQUIVALENTS-END OF PERIOD          $ 11,332        $ 10,750  
                                               =========       ========= 
SUPPLEMENTAL INFORMATION 
Non-cash investing and financing activities: 
Conversion of subordinated debentures 
   to common stock                                    --         30,294 

See notes to condensed consolidated financial statements.   
<PAGE> 
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES  
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)   
(in thousands, except per share amounts)  

NOTE A--INTERIM FINANCIAL STATEMENTS 

The accompanying unaudited condensed consolidated financial statements have  
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 1O-Q and Rule 
10-01 of Regulation S-X.  Accordingly, they do not include all of the  
information and footnotes required by generally accepted accounting 
principles for complete financial statements.  In the opinion of management, 
all adjustments (consisting only of normal recurring accruals) considered   
necessary for a fair presentation have been included.  For further   
information, refer to the consolidated financial statements and footnotes   
thereto included in the Company's Annual Report on Form 10-K for the year   
ended September 30, 1997.  Operating results for the three and nine month
periods ended June 30, 1998 are not necessarily indicative of the results that
may be expected for the year ending September 30, 1998.   

NOTE B--CASH AND SHORT-TERM INVESTMENTS   

Cash Equivalents: Cash and equivalents are defined as highly liquid  
investments with a maturity of three months or less at the date of purchase.

Short-Term Investments: Short-term investments consist of commercial paper,
U.S. Treasury securities, municipal debt securities, and corporate
obligations.  Management determines the appropriate classification of debt
securities at the time of purchase.  At June 30, 1998, the Company has
classified all securities as available-for-sale.  The available-for-sale
portfolio is comprised of highly liquid investments available for current
operations and general corporate purposes and, accordingly, is classified as
short-term investments.  Available-for-sale securities are stated at fair
value.   
   

Short-term investments at June 30, 1998 are comprised of: 
State and municipal securities             $36,233  
Corporate securities                        40,478   
                                            -------   
                                           $76,711 

The contractual maturities of short-term investments held at June 30, 1998 
are:   
Due in one year or less                     $50,052   
Due after one year through three years       26,659   
                                            -------   
                                            $76,711   

  

During the nine months ended June 30, 1998, gross realized gains on sales of
available-for-sale securities totaled $3. 

NOTE C--COMMON STOCK SPLIT 

On April 16, 1998, the Company's Board of Directors authorized a two-for-one
stock split effected in the form of a 100% stock dividend distributed on May
15, 1998 to shareholders of record on May 1, 1998.  Stockholders' equity has
been restated to give retroactive recognition to the stock split for all
periods presented by reclassifying from capital in excess of par value to
common stock the par value of the additional shares arising from the split.
In addition, all references in the financial statements and Management's
Discussion and Analysis of Operations and Financial Condition to number of
shares and per share amounts have been restated. 

NOTE D--LONG-TERM DEBT  

On October 22, 1997, the Company issued $65,000 of convertible subordinated  
debentures bearing interest at 5% and maturing on October 15, 2004.  On  
November 6, 1997, pursuant to an underwriters' option, the Company issued an  
additional $9,750 of convertible debentures. The debentures are convertible  
into common stock of the Company at any time prior to redemption or maturity  
at a conversion price of $26.375 per share, subject to change as defined in 
the Trust Indenture. The debentures are redeemable at any time after October  
15, 2000 at prices decreasing from 102.5% of the principal amount to par on  
October 15, 2003.     

NOTE E--EARNINGS PER SHARE   

Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
(SFAS 128), was effective for periods ending after December 15, 1997.  As a
result the Company changed the method used to compute earnings per share and
restated all prior periods presented.  Under the new requirements, basic
earnings per share excludes the dilutive effect of stock options and diluted
earnings per share must include the dilutive effect of stock options even if
the dilutive effect is immaterial.  A reconciliation of the numerators and the
denominators of the basic and diluted per share calculations follow:   

                                              For the three months ended  
                                                         June 30,  
                                                  1998            1997 
Numerator:  
    Net income available to common  
       stockholders, used for basic  
       earnings per share                       $ 9,437         $ 6,405  

    Effect of dilutive securities:  
        5% convertible debentures                   603              -- 
                                                -------         -------  
    Net income available to common   
       stockholders after assumed  
       conversions                              $10,040         $ 6,405  
                                                =======         ======= 

Denominator:  
    Denominator for earnings per common  
       stockholder-weighted average shares       33,718          31,080  
  
    Effect of dilutive securities:  
       Employee stock options                     2,633           2,008 
       5% convertible debentures                  2,834              -- 
       6 1/4% convertible debentures                 --           1,214  
                                                -------         -------  
    Dilutive potential common shares              5,467           3,222  

    Denominator for earnings per  
       share, assuming dilution                  39,185          34,302  
                                                =======         =======  

Earnings per common share                         $0.28           $0.21  
                                                  =====           ===== 
Earnings per share - assuming dilution            $0.26           $0.19  
                                                  =====           =====  



                                               For the Nine months ended  
                                                        June 30,  
                                                  1998            1997  
Numerator:  
    Net income available to common  
       stockholders, used for basic  
       earnings per share                       $23,183         $14,515  

    Effect of dilutive securities:  
       5% convertible debentures                  1,667              -- 
       6 1/4% convertible debentures                 --             521  
                                                -------         -------  
    Net income available to common   
       stockholders after assumed  
       conversions                              $24,850         $15,036 
                                                =======         =======  

Denominator:  
    Denominator for earnings per common  
       Stockholder-weighted average shares       33,388          29,104  

    Effect of dilutive securities:  
       Employee stock options                     2,640           1,520 
       5% convertible debentures                  2,599              --  
       6 1/4% convertible debentures                 --           3,068  
                                                -------         -------  
    Dilutive potential common shares              5,239           4,588  

    Denominator for earnings per  
       share, assuming dilution                  38,627          33,692  
                                                =======         =======  

Earnings per common share                         $0.69           $0.50  
                                                  =====           =====  
Earnings per share - assuming dilution            $0.64           $0.45  
                                                  =====           =====  

NOTE F--OTHER   

Product development expenditures, including software maintenance  
expenditures, for the nine months ended June 30, 1998 and 1997, were  
approximately $27,967 and $18,890, respectively.  After capitalization these  
amounts were approximately $22,050 and $13,257, respectively, and were charged
to operations as incurred.  For the same periods, amortization of capitalized
software costs amounted to $4,102 and $1,929, respectively.   

  


<PAGE> 



MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION 

The purpose of this section is to give interpretive guidance to the reader 
of the financial statements.  

RESULTS OF OPERATIONS   

The following table sets forth: (a) certain income statement items as a 
percentage of total revenues and (b) the percentage change for each item 
from the prior year comparative period.  
  
                                 % of Total Revenues        % Change from  
                                                              Prior Year  
                                Three Mos.   Nine Mos. Three Mos. Nine Mos. 
                                  Ended        Ended      Ended     Ended  
                                 June 30,     June 30,   June 30   June 30  
                                1998  1997   1998  1997  
Revenues: 
Outsourcing services             32%   33%    32%   34%      33%       30%  
Software sales                   24%   27%    24%   25%      24%       38%  
Maintenance and enhancements     15%   17%    16%   19%      27%       23%  
Software services                28%   23%    27%   22%      73%       75%  
Interest and other revenue        1%   --      1%   --      607%      962%  
                                ----  ----   ----  ----  
Total                           100%  100%   100%  100%      40%       42%  

Expenses:  
Cost of services, sales and   
   maintenance and enhancements  61%   61%    62%   62%      40%       41% 
Selling, general and  
   administrative                23%   25%    23%   25%      28%       33% 
Interest expense                  1%   --      1%    1%      --       161% 
Income before income taxes       15%   14%    14%   12%      50%       61% 



The following table sets forth the gross profit for each of the following 
revenue categories as a percentage of revenue for each such category and the 
total gross profit as a percentage of total revenue (excluding interest and 
other revenue).  The Company does not separately present the cost of 
maintenance and enhancements revenue as it is impracticable to separate such 
cost from the cost of software sales.  

                                      Three Months          Nine Months  
                                          Ended                Ended  
                                        June 30,              June 31,  
                                      1998   1997           1998   1997  

Gross Profit: 
   Outsourcing services                20%    19%            19%    19%  
   Software sales and maintenance  
      and enhancements                 58%    65%            57%    63%  
   Software services                   31%    17%            29%    18%  
                                       ---    ---            ---    ---  
   Total                               38%    39%            37%    38%  



<PAGE> 

Revenues   
Growth in outsourcing services revenue largely results from significant
contract signings.  The 33% and 30% increases in outsourcing services revenue
in the third quarter and first nine months of fiscal year 1998 are primarily
the result of (1) contracts signed after the third quarter of fiscal year 1997
including Agrilink Foods, the City of Anaheim, and Keystone Powdered Metals,
(2) first quarter fiscal year 1998 contract signings with Texas Southern
University and Nashville Electric Service, (3) and second quarter fiscal year
1998 contract signings with Lee County, FL and Universidad de Monterrey,
Mexico. 

Software sales increased 24% and 38% in the third quarter and first nine
months of fiscal year 1998 compared to the respective prior year periods due
primarily to increased BANNER software licenses to the higher education market
and increased licenses of BANNER Customer Information System (CIS) software to
the utility market.  In the third quarter of fiscal year 1998 these increases
were offset by decreases, compared to the prior-year period, in software
licenses in the manufacturing market.  

The 27% and 23% increases in maintenance and enhancements revenue in the third
quarter and first nine months of fiscal year 1998, respectively, were the
result of the growing installed base of clients primarily in the higher
education marketplace. The Company continues to experience a high annual
renewal rate on existing maintenance contracts.     

Software services revenue increased 73% and 75% in the third quarter and first
nine months of fiscal year 1998 compared to the prior year periods as the
result of increases in implementation and integration services in the
manufacturing, utility and higher education markets.  These increases were
offset by decreases, compared to the prior-year period, in services provided
to the international utility market.   

The increase in interest and other revenue in the third quarter and first nine
months of fiscal year 1998 is attributable to increased interest revenue
resulting from the increased cash and short-term investments balance during
the three and nine month periods ending June 30, 1998 as compared to the
respective prior year periods and to a one-time $695,000 gain on the sale of
an inactive product line in the first quarter of fiscal year 1998.   

Gross Profit   
Gross profit decreased as a percentage of total revenue (excluding interest  
and other revenue) from 39% in the third quarter of fiscal year 1997 to 38%  
for the third quarter of fiscal year 1998 and from 38% to 37% for the nine
month periods ending June 30, 1997 and 1998, respectively.  The total gross
profit percentage decreased primarily because of decreases in the software
sales and maintenance and enhancements gross profit which makes up the
greatest percentage of the Company's total gross profit.  This decrease was
primarily the result of an increase, at a rate greater than the revenue rate
increase, in product development expenditures throughout the Company,
principally in the manufacturing business.  The software services margin
increased primarily as a result of increases in the utility and manufacturing
businesses' services gross margin but margins continued to be impacted by
unprofitable international operations. The Company is continuing to focus on
installation and systems integration services in each of its markets. An
increase in services revenue as a percentage of total revenue historically has
resulted in a lower overall profit margin since service margins historically
have been lower than the margins derived from software sales and maintenance
and enhancements. 



LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL POSITION   

On October 22, 1997, the Company issued $65 million of convertible  
subordinated debentures bearing interest at 5% and maturing on October 15,  
2004.  On November 6, 1997, pursuant to an underwriters' option, the Company  
issued an additional $9.75 million of convertible debentures.  The debentures
are convertible into common stock of the Company at any time prior to  
redemption or maturity at a conversion price of $26.375 per share, subject to
change as defined in the Trust Indenture.  The debentures are redeemable at  
any time after October 15, 2000 at prices decreasing from 102.5% of the  
principal amount to par on October 15, 2003.   

The Company's cash and cash equivalents balance was $11.3 million and $29.8  
million at June 30, 1998 and September 30, 1997, respectively.  The  
short-term investments balance increased to $76.7 million at June 30,  
1998 as a result of the first quarter fiscal year 1998 debenture offering.   

Cash used in operating activities was $3.4 million for the first nine months
of fiscal year 1998 compared with cash provided by operating activities of
$5.4 for the first nine months of fiscal year 1997.  Operating cash flows have
decreased primarily due to an increase in accounts receivable balances at June
30, 1998 compared to September 30, 1997.  The increase in accounts receivable
balances are primarily the result of increased billings due to increased
revenues.  The decrease in operating cash flows is offset by an increase in
income before depreciation and amortization for the nine-month period ending
June 30, 1998 compared to the prior year period. 

The Company provides outsourcing services and software-related services,
including systems implementation and integration services.  Contract fees from
outsourcing services are typically based on multi-year contracts ranging from
five to 10 years in length, and provide a recurring revenue stream throughout
the term of the contract.  Software services contracts, including systems
implementation and integration services, usually have shorter terms than
outsourcing services contracts, and billings are sometimes milestone based.
During the beginning of a typical outsourcing services contract, services are
performed and expenses are incurred by the Company at a greater rate than in
the later part of the contract.  Billings usually remain constant during the
term of the contract and, in some cases, when a contract term is extended, the
billing period is also extended over the new life of the contract.  In certain
systems integration services contracts, payments are milestone based. In these
particular systems integration contracts, services are performed by the
Company but cannot be billed until the milestone is attained.  Revenue is
usually recognized as work is performed.  The resulting excess of revenues
over billings is reflected on the Company's Consolidated Balance Sheet as
unbilled accounts receivable.  The remaining unbilled accounts receivable
balance is comprised of software sales for which product has been shipped and
revenue has been recognized but amounts have not been billed due to the
payment terms established.  As an outsourcing services contract proceeds,
services are performed and expenses are incurred at a lesser rate, resulting
in billings exceeding revenue recognized, which causes a decrease in the
unbilled accounts receivable, as will the achievement of a milestone in a
systems integration services contract.   

Cash used in investing activities was $94.3 million for the first nine months
of fiscal year 1998 compared with $12.9 million for the first nine months of
fiscal year 1997.  The Company's primary use of cash for investing activities
was the purchase of investments available-for-sale from the proceeds of the
bond offering during the first quarter of fiscal year 1998.  

The Company signed a long-term lease agreement in May 1997 for a new office  
building at its Malvern campus.  The Company began to incur fit-up and  
remodeling costs in the third quarter of fiscal year 1998 and rent payments
will begin in the early part of the fourth quarter of fiscal year 1998.  In
July, the Company purchased land to build a new office building adjacent to
its existing building in Columbia, SC.  Construction is expected to begin in
the fourth quarter of fiscal year 1998.  The Company expects to invest in
product development at a rate greater than the expected growth in revenues
during fiscal year 1998.  

Cash provided by financing activities was $79.2 million for the first nine
months of fiscal year 1998 primarily as the result of the net proceeds of the
bond offering of $73.3 million.  Additionally, cash was provided by the
exercise of stock options by the Company's employees.   

The Company has a $30 million senior revolving credit facility available for  
general corporate purposes.  The credit facility agreement expires in June  
1999 with optional annual renewals.  As long as borrowings are outstanding,  
and as a condition precedent to new borrowings, the Company must comply with  
certain covenants established in the agreement.  Under the covenants, the  
Company is required to maintain certain financial ratios and other financial  
conditions.  The covenants allow the Company to pay non-stock dividends,
repurchase capital stock, and make distributions of assets to shareholders as
long as the aggregate amount does not exceed $5 million in any fiscal year and
to pay stock dividends. There were no borrowings outstanding under the credit
facility at June 30, 1998.   

The Company believes that its cash and cash equivalents, short-term  
investments, and borrowing arrangements should satisfy its financing needs for
the foreseeable future.   

On April 16, 1998, the Company's Board of Directors authorized a two-for-one
stock split effected in the form of a 100% stock dividend distributed on May
15, 1998 to shareholders of record on May 1, 1998.  Stockholders' equity has
been restated to give retroactive recognition to the stock split for all
periods presented by reclassifying from capital in excess of par value to
common stock the par value of the additional shares arising from the split.
In addition, all references in the financial statements and Management's
Discussion and Analysis of Operations and Financial Condition to number of
shares and per share amounts have been restated. 

Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
(SFAS 128), was effective for periods ending after December 15, 1997.  As a
result the Company changed the method used to compute earnings per share and
restated all prior periods presented.  Under the new requirements, basic
earnings per share excludes the dilutive effect of stock options and diluted
earnings per share must include the dilutive effect of stock options even if
the dilutive effect is immaterial.  Basic common shares increased in the third
quarter and first nine months of fiscal year 1998 compared to the prior-year
periods as a result of shares issued pursuant to the May 1997 redemption of
$27.3 million principal amount of convertible subordinated debentures, and
employee stock option exercises during the fiscal year 1998 periods. Shares
used in the diluted income per share calculation increased in the 1998 three
and nine-month periods versus 1997 for the aforementioned reasons, as a result
of the inclusion of the increased number of shares that would be outstanding
assuming conversion of the 5% convertible subordinated debentures and as a
result of an increased dilutive effect of stock options related to the
Company's rising stock price.   

Statement of Position 98-4, "Deferral of Certain Provisions of SOP 97-2" was
issued in April 1998, which defers for one year (i.e., until fiscal years
beginning after December 15, 1998) the application of certain provisions of
Statement of Position 97-2, "Software Revenue Recognition", which define what
is considered vendor-specific objective evidence of the fair value of the
various elements in a multiple-element arrangement. 

CONTINGENCIES  

On October 4, 1995, John J. Wallace filed a purported class action lawsuit in
the United States District Court for the Eastern District of Pennsylvania  
against the Company; Michael J. Emmi, Chairman of the Board, President and  
Chief Executive Officer of the Company; Michael D. Chamberlain, Senior Vice  
President and a director of the Company; and Eric Haskell, Senior Vice  
President, Finance and Administration, Treasurer and Chief Financial Officer  
of the Company.  The plaintiff filed an amended complaint on November 28,  
1995 and a second amended complaint on February 3, 1997.  The class period  
alleged is from June 5, 1995 through October 2, 1995.  The second amended  
complaint sought damages in unspecified amounts as well as equitable relief.  

In April 1996, the Company's Motion to Dismiss the amended complaint was  
granted in part and denied in part.  In September 1997, the Company's Motion  
to Dismiss the second amended complaint was granted in part and denied in  
part, and plaintiff was permitted to pursue a claim that defendants violated  
section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5  
promulgated thereunder to the extent that it alleges a failure to make 
certain disclosures in the Company's Form 10-Q for the third quarter of 
fiscal 1995.  On December 3, 1997, the Court approved a Stipulation of  
Dismissal and Entry of Final Judgment filed by the parties pursuant to which  
all remaining claims were dismissed with prejudice and the Court entered a  
final judgment in favor of the Company as to all remaining claims in the 
action.  On December 30, 1997 the plaintiff filed a notice of appeal with 
respect to those claims which were dismissed pursuant to the Company's Motions
to Dismiss.  Management believes the appeal is without merit and intends to
contest vigorously the appeal.  While management, based on its investigation
to date, believes that resolution of this action will not have a materially
adverse effect on the Company's consolidated financial position, the ultimate
outcome of this matter cannot be presently determined.  

FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK 

The matters discussed herein and elsewhere that are forward-looking 
statements, including statements concerning the Company's or management's 
intentions, beliefs, expectations, or predictions for the future, are based on
current management expectations that involve risks and uncertainties that 
could cause actual results to differ materially from those anticipated. 
The following discussion highlights some, but not all of these risks and 
uncertainties which may have a material adverse effect on the Company's 
business, financial condition and/or results of operations. 

The Company's revenues and operating results can vary substantially from
quarter to quarter based on a number of factors. Software sales revenues in
any quarter are dependent on the execution of license agreements and shipment
of product.  The execution of license agreements is difficult to predict for a
variety of reasons including the following:  a significant portion of the
Company's license agreements are typically signed in the last month of each
quarter; the duration of the Company's sales cycle is relatively long; the
size of transactions can vary widely; client projects may be postponed or
canceled due to changes in the client's management, budgetary constraints or
strategic priorities; and clients often exhibit a seasonal pattern of capital
spending. The Company has historically generated a greater portion of license
fees in total revenue in the last two fiscal quarters, although there is no
assurance that this will continue. 

Also, as the Year 2000 approaches, many potential clients are evaluating their
existing systems and must decide whether to repair or replace those systems
which have Year 2000 issues. While the Company believes that such evaluations
are favorably impacting demand for its software products and services, such
demand is subject to change as the Year 2000 approaches since services to
remediate Year 2000 issues must be completed in a timely manner and lead times
required to complete systems implementations preclude system replacement as a
timely solution to the Year 2000 issue as the millennium nears.  Given the
lack of precedent for an issue of this magnitude, the Company's ability to
accurately forecast the impact of the Year 2000 issue on quarter to quarter
revenue achievement is limited.   

Since a significant part of the Company's business results from software 
licensing, the Company's business is characterized by a high degree of 
operating leverage.  The Company's expense levels are based, in significant 
part, on the Company's expectations as to future revenues and are therefore 
relatively fixed in the short term.  If software licensing revenues do not 
meet expectations, net income is likely to be disproportionately adversely 
affected.  There can be no assurance that the Company will be able to increase
or even maintain its current level of profitability on a quarterly or annual
basis in the future.  It is therefore possible that in one or more future
quarters the Company's operating results will be below expectations.  In such
event, the price of the Company's common stock could be adversely affected.  

The success of the Company's business is dependent upon certain key
management, sales and technical personnel.  In addition, the Company believes
that to succeed in the future it will be required to continue to attract,
retain and motivate additional talented and qualified management, sales and
technical personnel.  Competition for hiring such personnel in the information
technology industry is intense and demand for such employees has, to date,
exceeded supply.  The Company from time to time experiences difficulty in
locating candidates with appropriate qualifications.  There can be no
assurance that the Company will be able to retain its key employees or that it
will be able to continue to attract, assimilate and retain other skilled
management, sales and technical personnel.  The loss of certain of its
existing key personnel or the inability to attract and retain additional
qualified employees in the future could have a material adverse effect on the
Company's business, operating results and financial condition. 

The application software industry is characterized by rapid technological
advances, changes in customer requirements, product introductions and evolving
industry standards.  The Company believes that its future success will depend
on its ability to continue to develop and market new products and enhancements
cost-effectively, which will necessitate continued investment in research and
development and sales and marketing.  There can be no assurance that the
Company's existing products will not be rendered obsolete or non-competitive
by new industry standards or changing technology, that the Company will be
able to develop and market new products successfully or that the Company's new
product offerings will be accepted by its markets.  Furthermore, programs as
complex as those offered by the Company may contain undetected errors or bugs
when they are first introduced or as new versions are released.  There can be
no assurance that, despite testing by the Company and by third-party test
sites, errors will not be found in new product offerings, with the possible
result of unanticipated costs and delays in market acceptance of these
products. 

Many currently installed software products are not able to distinguish 21st
century dates from 20th century dates.  As a result, computer software used by
many organizations may need to be upgraded to comply with Year 2000
requirements.  Significant uncertainty exists in the information technology
industry concerning the potential effects associated with the Year 2000
problem.   

The Company offers software products that are designed to be Year 2000
compliant.  However, some of the Company's clients are running product
versions that are not Year 2000 compliant.  The Company has been encouraging
such customers to migrate to current product versions. It is possible that the
Company may experience increased expenses in addressing migration issues for
such customers.  In addition, there can be no assurances that the Company's
software products do not contain errors or defects associated with Year 2000
date functions that may result in material costs to the Company.  In certain
client outsourcing contracts, the Company is evaluating Year 2000 issues for
client locations;  there can be no assurances that all Year 2000 issues will
be identified and remediated at client locations and it is possible that the
Company may experience increased expenses in addressing these issues.  Some
commentators have stated that a significant amount of litigation will arise
out of Year 2000 compliance issues.  Because of the unprecedented nature of
such litigation, it is uncertain whether or to what extent the Company may be
affected by it. 

The Company has an overall plan and a systematic process in place to make its
internal business information systems and non-information technology (IT)
systems Year 2000 ready within the next nine to twelve months. Contingency
plans have been developed to address remediation issues that may arise.
Although the Company is not aware of any material operational issues or costs
associated with preparing its internal systems and non-IT systems for the Year
2000, there can be no assurances that the Company will not experience serious
unanticipated negative consequences and/or material costs caused by undetected
errors or defects in the technology used in its internal systems and non-IT
systems.  Also, because of the interdependence of computer systems, the
Company is evaluating all material third parties relationships for Year 2000
issues. 

Certain of the Company's contracts are subject to fiscal funding clauses, 
which provide that in the event of budgetary constraints, the client is 
entitled to reduce the level of services to be provided by the Company with a
corresponding reduction in the fee to be paid by the client, or in certain 
circumstances, to terminate the services altogether.  While the Company has 
not been impacted materially by early terminations or reductions in service 
from the use of fiscal funding provisions in the past, there can be no 
assurance that such provisions will not give rise to early terminations or 
reductions of service in the future.  If clients of the Company representing a
substantial portion of the Company's revenues were to invoke the fiscal 
funding provisions of their OnSite services contracts, the Company's results 
of operations could be adversely affected.  

The Company provides software-related services, including systems 
implementation and integration services.  Services are generally provided 
under time and materials contracts and revenue is recognized as the services 
are provided.  In some circumstances, services are provided under fixed price 
arrangements in which revenue is recognized on the percentage of completion 
method.  Revisions in estimates of costs to complete are reflected in 
operations in the period in which facts requiring those revisions become 
known.  

Other factors that could affect the Company's future operating results include
the effect of publicity on demand for the Company's products and services;
general economic and political conditions; continued market acceptance of the
Company's products and services; the timing of services contracts and
renewals; continued competitive and pricing pressures in the marketplace; new
product introductions by the Company's competitors; and the Company's ability
to complete fixed-price contracts profitably. 





<PAGE> 


SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES   

PART II   

Item 1.  Legal Proceedings   

On October 4, 1995, John J. Wallace filed a purported class action lawsuit in
the United States District Court for the Eastern District of Pennsylvania  
against the Company; Michael J. Emmi, Chairman of the Board, President and  
Chief Executive Officer of the Company; Michael D. Chamberlain, Senior Vice  
President and a director of the Company; and Eric Haskell, Senior Vice  
President, Finance and Administration, Treasurer and Chief Financial Officer  
of the Company.  The plaintiff filed an amended complaint on November 28, 
1995 and a second amended complaint on February 3, 1997.  The class period  
alleged is from June 5, 1995 through October 2, 1995.  The second amended  
complaint sought damages in unspecified amounts as well as equitable relief.  

In April 1996, the Company's Motion to Dismiss the amended complaint was  
granted in part and denied in part.  In September 1997, the Company's Motion  
to Dismiss the second amended complaint was granted in part and denied in  
part, and plaintiff was permitted to pursue a claim that defendants violated  
section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5  
promulgated thereunder to the extent that it alleges a failure to make  
certain disclosures in the Company's Form 10-Q for the third quarter of  
fiscal 1995.  On December 3, 1997, the Court approved a Stipulation of  
Dismissal and Entry of Final Judgment filed by the parties pursuant to which  
all remaining claims were dismissed with prejudice and the Court entered a  
final judgment in favor of the Company as to all remaining claims in the  
action.  On December 30, 1997 the plaintiff filed a notice of appeal with  
respect to those claims which were dismissed pursuant to the Company's  
Motions to Dismiss.  Management believes the appeal is without merit and  
intends to vigorously contest the appeal.  While management, based on its  
investigation to date, believes that resolution of this action will not have  
a materially adverse effect on the Company's consolidated financial position,
the ultimate outcome of this matter cannot be presently determined.  


Item 5.  Other Information. 

Discretionary Proxy Voting Authority/Shareholder Proposals 

On May 21, 1998 the Securities and Exchange Commission adopted an amendment
to Rule 14a-4, as promulgated under the Securities Exchange Act of 1934.  The
amendment to Rule 14a-4(c)(1) governs the Company's use of its discretionary
proxy voting authority with respect to a shareholder proposal which the
shareholder has not sought to include in the Company's proxy statement. The
new amendment provides that if a proponent of a proposal fails to notify the 
Company at least 45 days prior to the month and day of mailing of the 
prior year's proxy statement, then the management proxies will be 
allowed to use their discretionary voting authority when the proposal is 
raised at the meeting, without any discussion of the matter in the proxy 
statement. 

With respect to the Company's 1999 Annual Meeting of Shareholders, if the
Company is not provided notice of a shareholder proposal, which the
shareholder has not previously sought to include in the Company's proxy
statement, by December 9, 1998, the management proxies will be allowed to use
their discretionary authority as outlined above. 


Item 6(a).  Exhibits   

Exhibit 10 - Oracle Alliance Agreement 

Exhibit 27 -- Financial Data Schedule  


Item 6(b).  Reports on Form 8-K   
   
The registrant filed a current report on Form 8-K dated April 15, 1998.  Under
Item 5, the registrant reported that its Board of Directors declared a
two-for-one split of the Company's common stock, par value $.01.  The split
took the form of a 100% stock dividend payable May 15, 1998 to owners of
record at the close of business on May 1, 1998. 






<PAGE> 


SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES   



SIGNATURES   


Pursuant to the requirements of the Securities Exchange Act of 1934, the  
registrant has duly caused this report to be signed on its behalf by the  
undersigned thereunto duly authorized.   


                         SYSTEMS & COMPUTER TECHNOLOGY CORPORATION  
                                        (Registrant)   


Date: 08/14/98                 /s/   
                         ________________________________   
    


                         Eric Haskell   
                         Senior Vice President, Finance and Administration,  
                            Treasurer and Chief Financial Officer