<PAGE>

                        UNITED STATES
             SECURITIES AND EXCHANGE COMMISSION
                   WASHINGTON D.C.  20549

                          FORM 10-Q
                      ----------------


     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934

             For the quarter ended June 30, 1999

               Commission file number 0-19433



                        [ LOGO ]


                Technology Solutions Company
            Incorporated in the State of Delaware
           Employer Identification No. 36-3584201


                  205 North Michigan Avenue
                         Suite 1500
                  Chicago, Illinois  60601
                       (312) 228-4500





  TSC (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 and (2) HAS BEEN
  subject to such filing requirements for the past 90 days.

  As of July 30, 1999, there were outstanding 41,913,666
  shares of TSC Common Stock, par value $.01.






<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY
                       Index to Form 10-Q
=================================================================


                             Part I
                                                          Page
                                                         Number
                                                         ------
FINANCIAL INFORMATION (UNAUDITED)

ITEM 1.  FINANCIAL STATEMENTS
   Consolidated Balance Sheets as of
     June 30, 1999 and December 31, 1998                   3

   Consolidated Statements of Operations
     for the Three Months and Six Months
     Ended June 30, 1999 and 1998                          4

   Consolidated Statements of Cash Flows
     for the Six Months Ended June 30, 1999 and 1998       5

   Notes to Consolidated Financial Statements              6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
       OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   16


                             Part II

OTHER INFORMATION

   Item 4                                                 27

   Item 6                                                 27

SIGNATURES                                                28

EXHIBIT INDEX                                             29


                              Page 2





<PAGE>

                      PART I.  FINANCIAL INFORMATION
===========================================================================
ITEM 1.  Financial Statements
                       TECHNOLOGY SOLUTIONS COMPANY
                        CONSOLIDATED BALANCE SHEETS
              (In thousands, except share and per share data)
                                  ASSETS
                                  ------
                                                      June 30, December 31,
                                                        1999       1998
                                                     ---------  ---------
                                                    (Unaudited)
CURRENT ASSETS:
  Cash and cash equivalents                         $  60,374   $  59,473
  Marketable securities                                24,017      25,269
  Receivables, less allowance for
    doubtful receivables of $5,834 and $4,845          84,303      69,212
  Deferred income taxes                                17,146      15,297
  Other current assets                                 11,218      13,764
                                                      -------     -------
    Total current assets                              197,058     183,015

COMPUTERS, FURNITURE AND EQUIPMENT, NET                 7,651       9,372

COST IN EXCESS OF NET ASSETS OF ACQUIRED BUSINESSES    14,630      17,901

LONG-TERM RECEIVABLES AND OTHER                         6,583       8,811
                                                     --------    --------
    Total assets                                     $225,922    $219,099
                                                     ========    ========

                   LIABILITIES AND STOCKHOLDERS' EQUITY
                   ------------------------------------
CURRENT LIABILITIES:
  Accounts payable                                   $  2,864    $  3,263
  Accrued compensation and related costs               29,347      25,184
  Deferred compensation                                16,482      16,494
  Restructuring accrual                                 3,483        --
  Other current liabilities                             7,037       5,913
                                                       ------      ------
                 Total current liabilities             59,213      50,854
                                                       ------      ------

COMMITMENTS AND CONTINGENCIES                              --          --

STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value; shares authorized -
     10,000,000; none issued                               --          --
  Common stock, $.01 par value; shares authorized -
     100,000,000; shares issued - 41,698,359              417         412
  Capital in excess of par value                       93,765      94,886
  Retained earnings                                    74,187      76,938
  Accumulated other comprehensive loss:
     Unrealized holding loss, net                         (61)         (9)
     Cumulative translation adjustment                 (1,599)     (1,336)
                                                      -------      ------
                                                      166,709     170,891
Less:  treasury stock, at cost (0 and 275,911 shares)      --      (2,646)
                                                      -------    --------
       Total stockholders' equity                     166,709     168,245
                                                     --------    --------
       Total liabilities and stockholders' equity    $225,922    $219,099
                                                     ========    ========

The accompanying Notes to Consolidated Financial Statements are an integral
                    part of this financial information.

                              Page 3




<PAGE>

                       TECHNOLOGY SOLUTIONS COMPANY

                   CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share data)



                                         For the Three       For the Six
                                          Months Ended       Months Ended
                                            June 30,           June 30,
                                       ----------------     ---------------
                                         1999     1998        1999    1998
                                       -------  -------     -------  ------
                                         (Unaudited)          (Unaudited)

REVENUES                               $78,411  $83,277    $155,346  $156,747
                                       -------  -------    --------  --------

COSTS AND EXPENSES:
Project personnel                       37,750   38,285      78,442    72,440
Other project expenses                  11,445   11,958      23,505    22,145
Management and administrative support   16,308   17,906      35,141    33,435
Goodwill amortization                    1,249      972       2,573     1,877
Restructuring charge                        --       --      10,522        --
Incentive compensation                   5,405    2,400       9,707     4,405
                                        ------   ------     -------  --------
                                        72,157   71,521     159,890   134,302
                                        ------   ------     -------  --------

OPERATING INCOME (LOSS)                  6,254   11,756      (4,544)   22,445
                                        ------   ------     -------   -------

OTHER INCOME (EXPENSE):
Net investment income                      775      673       1,627     1,369
Interest expense                           (25)     (21)        (69)      (40)
                                           ---      ---      ------     -----
                                           750      652       1,558     1,329
                                           ---      ---      ------     -----

INCOME (LOSS) BEFORE INCOME TAXES        7,004   12,408      (2,986)   23,774

INCOME TAX PROVISION (BENEFIT)           3,085    4,986        (235)    9,917
                                        ------   ------     -------   -------
NET INCOME (LOSS)                       $3,919  $ 7,422     $(2,751)  $13,857
                                        ======  =======     =======   =======

EARNINGS (LOSS) PER COMMON SHARE        $ 0.09  $  0.19    $ (0.07)   $  0.35
                                        ======  =======    =======    =======
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING             41,554   39,855      41,281    39,645
                                        ======  =======     =======   =======
EARNINGS (LOSS) PER COMMON SHARE
  ASSUMING DILUTION                     $ 0.09  $  0.17     $(0.07)   $  0.32
                                        ======  =======     =======   =======
WEIGHTED AVERAGE NUMBER
  OF COMMON AND COMMON EQUIVALENT
  SHARES OUTSTANDING                    42,920   43,568      41,281    43,370
                                        ======  =======     =======   =======


The accompanying Notes to Consolidated Financial Statements are an integral
part of this financial information.

                              Page 4




<PAGE>

                       TECHNOLOGY SOLUTIONS COMPANY

                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                                          For the
                                                      Six Months Ended
                                                          June 30,
                                                      -----------------
                                                       1999      1998
                                                      -------   -------
                                                        (Unaudited)
     CASH FLOWS FROM OPERATING ACTIVITIES:
      Net (loss) income                              $ (2,751) $ 13,857
      Restructuring charge                             10,522        --
       Adjustments to reconcile net income (loss)
         to net cash from operating activities:
         Depreciation and amortization                  4,898     4,177
         Provisions for receivable valuation
          allowances and reserves for possible losses   2,846       912
         (Gain) loss on sale of investments              (102)       67
         Deferred income taxes                         (1,982)    2,516

         Changes in assets and liabilities:
           Receivables                                (18,946)  (20,496)
           Purchases of trading securities related
            to deferred compensation program               12    (2,681)
           Refundable income taxes                         --     1,202
           Other current assets                         1,610    (5,949)
           Accounts payable                              (332)    1,625
           Accrued compensation and related costs       4,373     2,811
           Deferred compensation funds from employees     (12)    2,681
           Other current liabilities                   (1,573)    4,938
           Other assets                                 1,845    (1,495)
                                                      -------    ------
            Net cash provided by operating activities     408     4,165
                                                      -------    ------
     CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchase of available-for-sale securities        (1,500)   (5,950)
      Proceeds from available-for-sale securities       2,820     3,705
      Proceeds from held-to-maturity investments           --     1,320
      Capital expenditures, net                          (938)   (2,548)
      Net assets of acquired businesses
       and other assets                                    --      (382)
      Capitalized lease obligation                         --         4
             Net cash provided by                     -------    ------
              (used in) investing activities              382    (3,851)
                                                      -------    ------
     CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from exercise of stock options           2,164     2,544
      Proceeds from employee stock purchase plan        2,132     2,244
      Purchase of treasury stock                       (4,930)       --
             Net cash (used in) provided              -------    ------
              by financing activities                    (634)    4,788
                                                      -------    ------
     EFFECT OF EXCHANGE RATE CHANGES ON CASH
      AND CASH EQUIVALENTS                                745       (63)
                                                      -------    ------
     INCREASE IN CASH AND CASH EQUIVALENTS                901     5,039

     CASH AND CASH EQUIVALENTS, BEGINNING
        OF PERIOD                                      59,473    42,722
                                                      -------   -------
     CASH AND CASH EQUIVALENTS, END OF PERIOD         $60,374   $47,761
                                                      =======   =======

     The accompanying Notes to Consolidated Financial Statements are an
     integral part of this financial information.

                              Page 5




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
=================================================================


NOTE 1 - BASIS OF PRESENTATION

The  consolidated financial statements include  the  accounts  of
Technology Solutions Company and its subsidiaries ("TSC"  or  the
"Company"). The consolidated balance sheet as of June  30,  1999,
the  consolidated statements of operations for the  three  months
and  six months ended June 30, 1999 and 1998 and the consolidated
statements of cash flows for the six months ended June  30,  1999
and  1998 have been prepared by the Company without audit. In the
opinion  of  management, these financial statements  include  all
adjustments  necessary to present fairly the financial  position,
results of operations and cash flows as of June 30, 1999 and  for
all periods presented. All adjustments made have been of a normal
and   recurring   nature.   Certain  information   and   footnote
disclosures   normally  included  in  the  financial   statements
prepared   in  accordance  with  generally  accepted   accounting
principles  have been condensed or omitted. The Company  believes
that  the  disclosures included are adequate and provide  a  fair
presentation   of  interim  period  results.  Interim   financial
statements  are not necessarily indicative of financial  position
or  operating  results for an entire year. It is  suggested  that
these  interim  financial statements be read in conjunction  with
the  audited financial statements and the notes thereto  included
in  the  Company's Transition Report on Form 10-K for  the  seven
month  transition period ended December 31, 1998 filed  with  the
United  States Securities and Exchange Commission (SEC) on  March
30, 1999.

Certain  reclassifications have been made  to  prior  periods  to
conform to the current period classification.

NOTE 2 - THE COMPANY

TSC  delivers  business benefits through consulting  and  systems
integration   services  that  help  clients  transform   customer
relationships  and  improve  operations.  The  Company's  clients
generally are located throughout the United States and in Europe,
Latin America, Canada and Australia.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES   OF  CONSOLIDATION-The    accompanying   consolidated
financial statements include the accounts of the Company and  all
of  its  subsidiaries. All significant intercompany  transactions
have  been  eliminated. Acquired businesses are included  in  the
results of operations since their acquisition dates.

FISCAL  YEAR CHANGE-On November 22, 1998, the Company's Board  of
Directors voted to change the fiscal year of the Company  from  a
fiscal year ending on the thirty-first day of May in each year to
a  calendar  year ending on the thirty-first day of  December  in
each year.

REVENUE RECOGNITION-The Company derives substantially all of  its
revenues from information technology (IT), strategic business and
management  consulting,  systems  integration,  programming,  and
packaged  software integration and implementation  services.  The
Company  recognizes  revenue on contracts as  work  is  performed

                              Page 6




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
=================================================================


primarily  based on hourly billing rates. Out-of-pocket  expenses
are   presented  net  of  amounts  billed  to  clients   in   the
accompanying consolidated statements of operations. Contracts are
performed in phases. Losses on contracts, if any, are reserved in
full  when  determined.  Revenue from licensing  of  software  is
recognized  upon  delivery of the product. The Company  does  not
presently  have any significant maintenance and support contracts
for software licensed to clients.

CASH AND CASH EQUIVALENTS-The Company considers all highly liquid
investments   readily  convertible  into  cash   (with   original
maturities of three months or less) to be cash equivalents. These
short-term investments are carried at cost plus accrued interest,
which approximates market.

MARKETABLE   SECURITIES-The   Company's   marketable   securities
primarily consist of preferred stocks and trading securities. The
preferred  stocks, all of which are classified as  available-for-
sale,  are  reported  at fair value, with  unrealized  gains  and
losses  excluded  from earnings and reported as a  net  after-tax
amount  in  a  separate component of stockholders'  equity  until
realized.  The  Company's investments related  to  the  executive
deferred  compensation plan are classified as trading securities,
with  unrealized  gains  and  losses included  in  the  Company's
consolidated statements of operations. Realized gains  or  losses
are determined on the specific identification method.

COMPUTERS,  FURNITURE  AND  EQUIPMENT-Computers,  furniture   and
equipment  are carried at cost and depreciated on a straight-line
basis  over their estimated useful lives. Useful lives  generally
are five years or less.

COST IN EXCESS OF NET ASSETS OF ACQUIRED BUSINESSES-The excess of
cost over the fair market value of the net identifiable assets of
businesses  acquired (goodwill) is amortized on  a  straight-line
basis, typically over a five-year period.

FOREIGN  CURRENCY  TRANSLATION-All  assets  and  liabilities   of
foreign  subsidiaries are translated to U.S. dollars  at  end  of
period exchange rates. The resulting translation adjustments  are
recorded  as  a  component of stockholders'  equity.  Income  and
expense items are translated at average exchange rates prevailing
during  the  period.  Gains  and  losses  from  foreign  currency
transactions   of   these  subsidiaries  are  included   in   the
consolidated statements of operations. The functional  currencies
for   the   Company's  foreign  subsidiaries  are   their   local
currencies.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS-The  carrying  values  of
current   assets   and  liabilities  and  long-term   receivables
approximated their fair values at June  30, 1999 and December 31,
1998.  Investments pertaining to minor investments  in  companies
for  which  fair value is not readily available are  believed  to
approximate their carrying amount.

                              Page 7




<PAGE>


                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
=================================================================


STOCK-BASED  COMPENSATION-The Company  accounts  for  stock-based
compensation  using  the  intrinsic value  method  prescribed  in
Accounting Principles Board (APB) Opinion No. 25, "Accounting for
Stock  Issued  to  Employees," and related  interpretations.  The
Company  recognizes no compensation expense for its stock  option
plan or employee stock purchase plan.

INCOME TAXES-The Company uses an asset and liability approach  to
financial  accounting  and reporting for income  taxes.  Deferred
income  taxes are provided when tax laws and financial accounting
standards differ with respect to the amount of income for a  year
and  the  basis of assets and liabilities. The Company  does  not
provide  U.S.  deferred  income  taxes  on  earnings  of  foreign
subsidiaries which are expected to be indefinitely reinvested.

ESTIMATES AND ASSUMPTIONS-The preparation of financial statements
in  conformity  with  generally  accepted  accounting  principles
requires  management to make assumptions that affect the reported
amounts  of  assets and liabilities at the date of the  financial
statements  and  the  reported amounts of revenues  and  expenses
during  the  reporting period. Actual results could  differ  from
those estimates.

NOTE 4 - STOCK OPTIONS

As  of  June 30, 1999, options to purchase 9.6 million shares  of
common  stock  were  outstanding  and  options  to  purchase   an
additional 0.6 million shares of common stock were available  for
grant under the Technology Solutions Company 1996 Stock Incentive
Plan.

eLoyalty Corporation,  a  wholly owned subsidiary of the Company,
has  adopted  the  eLoyalty Corporation 1999 Stock Incentive Plan
(the "eLoyalty Plan").  The  number  of  eLoyalty  common  shares
initially available for all grants of awards over the term of the
eLoyalty Plan is equal to approximately 12 percent of the aggregate
number  of  eLoyalty  common  shares  that  would  be  issued and
outstanding after the Asset Transfer (defined in Note 10) and after
giving effect to the purchase of eLoyalty common  shares  by  the
unaffiliated investors described in Note 10. On July 1, 1999, options
to purchase approximately 89 percent of the number of eLoyalty shares
initially available for grant under the eLoyalty Plan were issued
to certain Company employees, all of which have an exercise price
representing  the  fair market  value of an eLoyalty share on the
date of grant.

The eLoyalty Plan also provides that, in the  event of a  spin-off
of eLoyalty, substitute options to purchase eLoyalty common shares
("Substitute Options") are  available  for  issuance to holders of
those options to purchase the  Company's  common  shares ("Company
Options") that were granted prior  to June 22, 1999. The number of
eLoyalty shares subject to Substitute  Options will not exceed the
total number of eLoyalty shares that  would  be distributed in the
proposed spin-off with respect to shares of  Company  common stock
equal in number to the shares subject to Company options immediately
prior to the spin-off. The terms and conditions of each Substitute
Option, such as the term and the schedule of exercisability, shall
be the same as those of the Company Option to which the Substitute
Option relates.

NOTE 5 - CAPITAL STOCK

During  the quarter ended March 31, 1999, the Company repurchased
480,000 shares of the Company's outstanding Common Stock for $4.9
million  under a 2,000,000 share repurchase program announced  in
November 1998. No shares were purchased during the quarter  ended
June 30, 1999.

                              Page 8




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
=================================================================


NOTE 6 - EARNINGS (LOSS) PER COMMON SHARE

The  Company  discloses  basic and diluted  earnings  (loss)  per
common  share in the consolidated statements of operations  under
the  provisions  of SFAS No. 128, "Earnings Per Share."  Earnings
(loss) per common share assuming dilution is computed by dividing
net income (loss) by the weighted average number of common shares
outstanding  during  each  period  presented,  including   common
equivalent  shares  arising from the assumed  exercise  of  stock
options,  where appropriate. Earnings (loss) per common share  is
computed  by  dividing net income (loss) by the weighted  average
number of common shares outstanding during each period presented.
All share and per share amounts have been adjusted to reflect all
of the Company's prior stock splits.



          Reconciliation of Basic and Diluted Earnings Per Share
                  (In thousands, except per share data)
       -------------------------------------------------------------
           For the Three Months Ended     For the Three Months Ended
                  June 30, 1999                  June 30, 1998
           --------------------------     --------------------------
            Net            Per Common      Net            Per Common
           Income   Shares    Share       Income   Shares    Share
           ------   ------ ----------     ------   ------ ----------

Basic
Earnings
Per Share  $3,919   41,554      $0.09      $7,422   39,855    $0.19
                                =====                         =====
Effect
of
Stock
Options        --    1,366                     --    3,713
           ------   ------                 ------   ------

Diluted
Earnings
Per Share  $3,919   42,920      $0.09      $7,422   43,568    $0.17
           ======   ======      =====      ======   ======    =====




                              Page 9




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
===================================================================


      Reconciliation of Basic and Diluted (Loss) Earnings Per Share
                  (In thousands, except per share data)
       -------------------------------------------------------------
           For the Six Months Ended       For the Six Months Ended
                  June 30, 1999                  June 30, 1998
           --------------------------     --------------------------
            Net            Per Common      Net            Per Common
           (Loss)   Shares    Share       Income   Shares    Share
           ------   ------ ----------     ------   ------ ----------

Basic
(Loss)
Earnings
Per Share $(2,751)   41,281     $(0.07)   $13,857   39,645     $0.35
                                 =====                         =====
Effect
of
Stock
Options        --        --                    --    3,725
           ------    ------                ------   ------

Diluted
(Loss)
Earnings
Per Share $(2,751)   41,281      $(0.07)   $13,857   43,370    $0.32
           ======    ======       =====    =======   ======    =====




                              Page 10




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
================================================================


NOTE 7 - COMPREHENSIVE INCOME (LOSS)

In  June  1997, the Financial Accounting Standards  Board  (FASB)
issued  SFAS  No.  130,  "Reporting  Comprehensive  Income."  The
Company  adopted SFAS No. 130 during the transition period  ended
December  31, 1998. This statement established new standards  for
reporting  and displaying comprehensive income and its components
in  the  financial statements. The Company's comprehensive income
(loss) was as follows:


                                              For the Three Months Ended
(In thousands)                                          June 30,
                                              --------------------------
                                                   1999             1998
                                              ----------       ---------
Net Income                                        $3,919          $7,422

Accumulated Other Comprehensive (Loss) Income:
   Unrealized Holding Losses of
     Available-for-Sale Securities, Net of Tax       (29)             --
   Cumulative Translation Adjustment,Net of Tax     (694)             15
                                                  ------          ------
    Other Comprehensive (Loss) Income               (723)             15
                                                  ------          ------
Total Comprehensive Income                        $3,196          $7,437
                                                  ======          ======



                                              For the Six Months Ended
(In thousands)                                          June 30,
                                              --------------------------
                                                   1999             1998
                                              ----------       ---------
Net (Loss) Income                                $(2,751)        $13,857

Accumulated Other Comprehensive (Loss) Income:
   Unrealized Holding (Losses) Gains of
     Available-for-Sale Securities, Net of Tax       (52)             65
   Cumulative Translation Adjustment,Net of Tax     (263)           (209)
                                                  ------         -------
    Other Comprehensive (Loss)                      (315)           (144)
                                                 -------         -------
Total Comprehensive (Loss) Income                $(3,066)        $13,713
                                                 =======         =======



                              Page 11




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
================================================================


NOTE 8 - BUSINESS SEGMENTS

The  Company is organized into two business segments  which  each
have  their  own business focus and service offering expertise  -
Enterprise Solutions (E-Solutions) and eLoyalty. Each serves  the
Company's  customers in the U.S. and international  markets.  The
Company believes that a structure based on these focused business
segments  addresses  its  clients'  needs  for  very  specialized
industry  and  systems  knowledge and allows  its  employees  the
flexibility  and opportunity to grow and develop.  Each  business
segment  develops its own specific methodologies, tools,  project
management  plans,  best practice and benchmark  information  and
templates.   The   E-Solutions  business  segment   provides   IT
consulting   and   business  services  that   help   clients   in
implementing  third-party  application  software  packages,  cost
controls and related services to implement strategic change in an
organization.  The E-Solutions business segment has  competencies
in  the areas of Enterprise Resource Planning (ERP); Supply Chain
Management;   e-business;  Knowledge  management  including  data
warehousing  and business intelligence; and Change  and  Learning
Technologies.   The   eLoyalty  business  segment   provides   IT
consulting and strategic business consulting services  that  help
clients improve operations, transform customer relationships  and
build and enhance customer loyalty.

Segment  data  also includes disclosing corporate  infrastructure
costs  and  corporate  adjustments separately  as  corporate  and
Global Core Services (GCS). The objective of the GCS function  is
to  facilitate local decision-making and support the autonomy  of
the business segments, practice areas and project managers, while
maintaining  the  internal structure necessary to  support  TSC's
goals.  The  functional areas within this  area  include:  senior
corporate  management; accounting; financial reporting;  finance;
tax;   legal;  treasury;  human  resources;  employee   benefits;
marketing;  public  and  investor relations;  office  operations;
recruiting  support; training; internal communications;  internal
technology   applications;  planning;  quality   assurance;   and
insurance. GCS costs also include goodwill amortization.

There  are  no  intersegment revenues. The Company evaluates  the
performance of its segments and allocates resources to them based
on revenues, operating income and receivables.


                              Page 12




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
================================================================


The  table below presents information about the reported revenue,
operating income (loss) and receivables of TSC (in thousands) for
the three months and six months ended June 30, 1999 and 1998.


                                              Corporate and
Three Months Ended                             Global Core    Consolidated
June 30, 1999         E-Solutions   eLoyalty    Services(a)       Total
------------------    -----------   --------  -------------   ------------
Revenues                  $43,777   $34,634    $     --           $78,411
Operating income          $10,281   $ 8,577    $ (12,604)         $ 6,254
Receivables               $44,217   $45,920    $     --           $90,137

                                              Corporate and
Three Months Ended                             Global Core    Consolidated
June 30, 1998         E-Solutions   eLoyalty    Services(a)       Total
------------------    -----------   --------  -------------   ------------
Revenues                  $57,938   $25,339    $     --           $83,277
Operating income          $15,161   $ 5,885    $ (9,290)          $11,756
Receivables               $47,607   $24,591    $     --           $72,198

(a) Operating results include goodwill amortization of $1,249 and $972
    for the three months ended June 30, 1999 and 1998, respectively.


                                              Corporate and
Six Months Ended                               Global Core    Consolidated
June 30, 1999         E-Solutions   eLoyalty    Services(a)       Total
------------------    -----------   --------  -------------   ------------
Revenues                  $89,979   $65,367    $     --           $155,346
Operating income (loss)   $15,512   $15,766    $ (35,822)(b)      $ (4,544)
Receivables               $44,217   $45,920    $     --           $ 90,137


                                              Corporate and
Six Months Ended                               Global Core    Consolidated
June 30, 1998         E-Solutions   eLoyalty    Services(a)       Total
------------------    -----------   --------  -------------   ------------
Revenues                 $108,313   $48,434    $     --           $156,747
Operating income          $26,706   $10,200    $ (14,461)         $ 22,445
Receivables               $47,607   $24,591    $     --           $ 72,198


(a) Operating results include goodwill amortization of $2,573 and $1,877
    for the six months ended June 30, 1999 and 1998,respectively.

(b) Operating results includes a restructuring charge of $10,522.


                              Page 13




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
================================================================


The  following  is  revenue and long-lived asset  information  by
geographic area (in thousands):

Three Months Ended               United        Foreign     Consolidated
June 30, 1999                    States      Subsidiaries       Total
------------------              --------     ------------  ------------
Revenues                        $ 69,148         $ 9,263       $ 78,411
Identifiable assets             $192,473         $33,449       $225,922


Three Months Ended               United        Foreign     Consolidated
June 30, 1998                    States      Subsidiaries       Total
------------------              --------     ------------  ------------
Revenues                        $ 76,855         $ 6,422       $ 83,277
Identifiable assets             $181,895         $19,840       $201,735


Six Months Ended                 United        Foreign     Consolidated
June 30, 1999                    States      Subsidiaries       Total
------------------              --------     ------------  ------------
Revenues                        $136,949         $18,397       $155,346
Identifiable assets             $192,473         $33,449       $225,922

Six Months Ended                 United        Foreign     Consolidated
June 30, 1998                    States      Subsidiaries       Total
------------------              --------     ------------  ------------
Revenues                        $143,258         $13,489       $156,747
Identifiable assets             $181,895         $19,840       $201,735


Foreign  revenue  is  based on the country  in  which  the  legal
subsidiary is domiciled. No single foreign country's revenue  was
material to the consolidated revenues of the Company.

                              Page 14




<PAGE>

                    TECHNOLOGY SOLUTIONS COMPANY

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
================================================================


NOTE 9 - OTHER EVENTS

On  March 30, 1999, the Company announced a number of changes  to
its business operations and, as a result, the Company recorded  a
restructuring  charge  of  $10.5 million  associated  with  those
changes  and the severance of approximately 300 people, primarily
consulting  personnel.  The restructuring charge  was  determined
based  on  a plan prepared at the time the restructuring  actions
were  approved  by management and the Board of Directors.  During
the six months ended June 30, 1999, the Company used $7.0 million
of the restructuring accrual as a result of $5.6 million of costs
associated with the severance of approximately 240 employees  and
$1.4   million   in  asset  write-offs  and  other   costs.   The
restructuring accrual balance is considered adequate to cover the
remaining committed restructuring actions.

Additionally, the Company filed and received preliminary comments
from  the  U.S. Internal Revenue Service regarding  the  proposed
spin-off  of the Company's eLoyalty business segment  as  a  non-
taxable  distribution for U.S. federal income tax  purposes.  The
Company  expects to offer not more than 20 percent of the  common
shares of eLoyalty in an initial public offering (IPO) during the
late fall of 1999, with the proposed tax-free distribution of the
remaining  eLoyalty shares held by the Company in a  spin-off  to
follow at a later date (See Note 10).

NOTE 10 - SUBSEQUENT EVENT

On August 13, 1999, the Company sold 500,000 share of Common Stock
(the "Company Shares")  to  unaffiliated  investors  in  a private
placement  for  cash  proceeds  of approximately $4.5 million. The
investors have a single  demand registration right with respect to
the Company Shares, which  expires  twelve  months  after the date
of the purchase.

In   addition,  the   investors  have  committed to  purchase for
$8.4 million approximately 5 percent of the number of common shares
(the "eLoyalty Shares") of the Company's wholly owned subsidiary,
eLoyalty Corporation,  that would be issued and outstanding after
the Company  completes  the  proposed transfer to eLoyalty of the
assets and liabilities of the  business historically conducted as
the Company's ECM division  (the "Asset Transfer"). The agreement
with  the   investors   provides  that  the prosposed purchase of
eLoyalty Shares is subject to the receipt  of a favorable revenue
ruling  from  the  Internal  Revenue Service  with respect to the
proposed tax-free spin-off of eLoyalty to the Company's stockholders,
the consummation of the Asset Transfer and certain other customary
conditions. The Company has agreed, pursuant to the agreement, to
use commercially reasonable efforts to effect the Asset  Transfer
as soon as is reasonably practicable after receipt of a favorable
revenue  ruling.  In  the  event  the  Asset  Transfer  is not so
consummated and the invesors do not purchase the eLoyalty Shares,
the  Company  could   become   obligated  to  make  a  liquidated
damage payment of $1.2 million to the investors. Alternatively, if
the investors purchase the eLoyalty Shares and the proposed initial
public offering  of  eLoyalty  common shares or the proposed spin-off
of eLoyalty  does  not  occur  within one year after the date of the
agreement,  eLoyalty  could  become  obligated  to repurchase the
eLoyalty   Shares   then    held    by    the   investors  at  a
premium totaling $1.2 million over the price paid by the investors
for  such shares. The  agreement further provides that, after the
purchase  of the eLoyalty Shares, a representative of each of the
two  investor  groups  will be appointed to the eLoyalty Board of
Directors.

                              Page 15




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

          ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
=================================================================

RESULTS OF OPERATIONS

Three Months Ended June 30, 1999 Compared With Three Months Ended
 June 30, 1998

Consolidated  net revenues for the quarter ended  June  30,  1999
decreased 6 percent to $78.4 million compared with $83.3  million
for  the  same period last year. Net revenues from the Enterprise
Solutions (E-Solutions) business contributed $43.8 million during
the  quarter ended June 30, 1999 compared to $57.9 million in the
prior  period, a decrease of 24 percent. This decrease was mainly
due  to  a decline in the demand for certain services of  the  E-
Solutions  business  as  a  result of  clients  facing  budgetary
restraints  as  they focus on Year 2000 issues.   This  has  been
evidenced  by  a  reduction in new license sales by  the  package
software  vendors such as PeopleSoft and Baan. Net revenues  from
the  eLoyalty  business  contributed  $34.6  million  during  the
quarter  ended  June 30, 1999 compared to $25.3  million  in  the
prior period, an increase of 37 percent. This improvement was due
to an increased demand for eLoyalty consulting services.

Project  personnel  costs,  which represent  mainly  professional
salaries  and benefits, decreased slightly to $37.8  million  for
the  quarter ended June 30, 1999 from $38.3 million for the  same
period  last  year,  a decrease of 1 percent.  The  decrease  was
mainly  due  to  a  decrease in average  professional  headcount.
Project personnel costs as a percentage of net revenues increased
to  48  percent  for  the  quarter  ended  June   30,  1999  from
46  percent  for  the same period last year due  to  lower  staff
utilization and the decline in E-Solutions revenues.

Other  project expenses consist of nonbillable expenses  directly
incurred  for client projects and business development  including
recruiting fees, sales and marketing expenses, personnel training
and   provisions  for  valuation  allowances  and  reserves   for
potential  losses on continuing projects. Other project  expenses
for the quarter ended June  30, 1999 were $11.4 million, compared
with $11.9 million in the comparable period last year, a decrease
of  $0.5  million,  or 4 percent. The decrease in  other  project
expenses  primarily included the following: a  decrease  of  $0.9
million  in domestic hiring, training, communication and computer
expenses due to a decrease in average headcount and a decrease of
$0.6  million  in  domestic practice area  development  including
marketing,  business development, travel and  sales  commissions.
These  decreases were offset by an increase in the provision  for
valuation  allowances and reserves for potential losses  of  $0.9
million  and  an increase in international costs of $0.2  million
associated   with  travel,  marketing  and  business  development
expenses. Other project expenses as a percentage of net  revenues
remained  virtually unchanged from the same period last  year  at
approximately 14 percent.

Management    and   administrative   support   costs    decreased
$1.6 million to $16.3 million for the quarter ended June 30, 1999
from  $17.9 million for the same period last year, a decrease  of
9  percent.  Approximately  $0.6 million  of  this  decrease  was
attributable to the decrease in Global Core Service  (GCS)  costs
over  last year. The decrease in GCS costs versus the same period
last  year  included: decreased expenses in the internal  systems
and  human  resources  areas  of  $0.4  million;  a  decrease  in
corporate  recruiting expenses of $0.4 million as a result  of  a
reduction

                              Page 16




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

in  headcount;  and  a  net decrease in various  other  costs  of
$0.3  million  including corporate legal,  finance  and  investor
relations  costs. These increases were offset by higher marketing
expenses  of  $0.5  million as a result  of  increased  corporate
marketing   efforts.  The  Company  also  had   a   decrease   of
$1.0  million  of  practice  area management  and  administrative
costs.   This   decrease  primarily  included  a   reduction   of
international expenses of $0.7 million and a reduction in various
other   domestic  management  and  administrative   expenses   of
$0.5 million, which included items such as recruiting, sales  and
other  expenses.  These  decreases were partially  offset  by  an
increase  in  regional  management  and  practice  area   support
personnel of $0.2 million.

Goodwill  amortization increased to $1.2 million for the  quarter
ended  June 30, 1999 compared to $1.0 million for the same period
last  year.  This  increase reflects the effect of  the  earn-out
payments  made  during  the seven month transition  period  ended
December  31,  1998 related to the acquisitions  of  The  Bentley
Company, Inc. and Aspen Consultancy Ltd.

Incentive  compensation of $5.4 million was  accrued  during  the
quarter ended June 30, 1999 compared to $2.4 million for the same
period last year.  Incentive compensation as a percentage of  net
revenues  increased to 7 percent for the quarter ended  June  30,
1999  compared  to 3 percent for the same period last  year.  The
increase  was  due  to an increase in the incentive  compensation
expense  for  non-vice president personnel  to  improve  employee
retention,  as  well  as an increase in vice president  incentive
compensation  expense  as  a result of the  Company  meeting  its
performance  target  for  the quarter.  The  Company  expects  to
continue  to  accrue incentive compensation throughout  the  1999
calendar year.

Consolidated  operating income was $6.3 million for  the  quarter
ended  June 30, 1999 compared with consolidated operating  income
of  $11.8 million in the prior period due to the reasons outlined
above.  Operating income from the E-Solutions business was  $10.3
million during the quarter ended June 30, 1999 compared to  $15.2
million  in  the  prior period, a decrease of  32  percent.  This
decrease  was mainly due to a decrease in the demand for  certain
services in the E-Solutions business, lower staff utilization and
lower  billing rates. Operating income from the eLoyalty business
was  $8.6 million during the quarter ended June 30, 1999 compared
to  $5.9  million in the prior period, an increase of 46 percent.
This  increase was primarily due to an increase in billing  rates
and  the  increased  demand  for  eLoyalty  services,  which  was
consistent   with  its  higher  revenues,  offset  in   part   by
investments in product development.

Corporate and GCS costs for the quarter ended June 30, 1999  were
$12.6  million compared to $9.3 million in the prior  period,  an
increase  of 36 percent. The increase in corporate and GCS  costs
primarily  represents  a change in the corporate  adjustment  for
incentive compensation. (Note that all corporate adjustments  are
included  in  the GCS category.) For the quarter ended  June  30,
1998,  the  Company  did  not meet certain  internal  performance
targets  and,  accordingly, recorded a  corporate  adjustment  to
reduce  the consolidated incentive compensation accrual. However,
the  Company  fully met its internal performance targets  in  the
corresponding   1999   period  and,   therefore,   no   incentive
compensation  adjustment  was needed.  Because  the  1998  period

                              Page 17




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

included   an   adjustment   to  reduce  consolidated   incentive
compensation  expense  while the 1999  period  included  no  such
adjustment,  the  1999  corporate and GCS total  costs  increased
relative  to the corresponding 1998 costs. In addition,  goodwill
amortization  for the quarter ended June 30, 1999 increased  from
the prior period due to the earn-out payments made related to the
acquisitions  of The Bentley Company, Inc. and Aspen  Consultancy
Ltd.   These  increases were partially offset by the decrease  in
GCS  costs  described above in the discussion of  management  and
administrative support costs.

Net  investment income for the quarter ended June  30,  1999  was
$0.8  million compared to $0.7 million for the same period a year
ago.  The increase is a result of higher cash and cash equivalent
balances for the quarter ended June 30, 1999 compared to the same
period a year ago.

The  Company's effective tax rate for the quarter ended June  30,
1999 was 44 percent compared to 40 percent for the same period  a
year ago. The rate for the quarter ended June 30, 1999 was higher
than  the  prior  period  due to a larger proportion  of  pre-tax
earnings being generated in foreign, high tax-rate jurisdictions.

Weighted  average  number of common shares outstanding  increased
primarily  due to the exercise of stock options and the  issuance
of  shares  under  the  Company's employee stock  purchase  plan.
Weighted  average  number of common and common equivalent  shares
outstanding  decreased because the assumed  exercise  of  certain
stock  options were considered to be antidilutive, and therefore,
were excluded from the computation of diluted earnings per share.

RESULTS OF OPERATIONS

Six  Months  Ended June 30, 1999 Compared With Six  Months  Ended
June 30, 1998

Consolidated net revenues for the six months ended June 30,  1999
was  $155.3  million, essentially flat with  the  $156.7  million
reported in the same period last year. Net revenues from  the  E-
Solutions  business  contributed $90.0  million  during  the  six
months  ended  June 30, 1999 compared to $108.3  million  in  the
prior  period,  a  decrease  of 17  percent.  This  decrease  was
partially due to a decline in the demand for certain services  of
the  E-Solutions business as a result of clients facing budgetary
restraints  as  they focus on Year 2000 issues.   This  has  been
evidenced  by  a  reduction in new license sales by  the  package
software  vendors such as PeopleSoft and Baan. Net revenues  from
the  eLoyalty business contributed $65.4 million during  the  six
months ended June 30, 1999 compared to $48.4 million in the prior
period, an increase of 35 percent. This improvement was due to an
increased demand for eLoyalty consulting services.

Project  personnel  costs,  which represent  mainly  professional
salaries  and benefits, increased to $78.4 million  for  the  six
months ended June 30, 1999 from $72.4 million for the same period
last year, an increase of 8 percent. The increase was mainly  due
to an increase in average professional salaries, partially offset
by  a decrease in professional headcount. Project personnel costs

                              Page 18




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

as  a percentage of net revenues increased to 50 percent for  the
six  months  ended  June 30, 1999 from 46 percent  for  the  same
period  last year due to lower staff utilization and the  decline
in  E-Solutions  revenues.  To reduce  these  costs  and  improve
utilization,  the  Company  streamlined  and  refocused  the   E-
Solutions  business, which resulted in a restructuring charge  of
$10.5 million (as discussed further in this section).

Other  project expenses consist of nonbillable expenses  directly
incurred  for client projects and business development  including
recruiting fees, sales and marketing expenses, personnel training
and   provisions  for  valuation  allowances  and  reserves   for
potential  losses on continuing projects. Other project  expenses
for  the  six  months  ended June 30, 1999  were  $23.5  million,
compared  with $22.1 million in the comparable period last  year,
an  increase of $1.4 million, or 6 percent. The increase in other
project expenses primarily included the following: an increase in
the provision for valuation allowances and reserves for potential
losses of $1.9 million and an increase in international costs  of
$0.7  million  associated  with travel,  marketing  and  business
development expenses.  These increases were partially offset by a
decrease  of  $1.2 million in domestic practice area  development
including  marketing,  business  development,  travel  and  sales
commissions.   Other  project expenses as  a  percentage  of  net
revenues  increased  to  15  percent for  the  six  months  ended
June  30,  1999  from 14 percent for the same  period  last  year
mainly as a result of the items mentioned above.

Management    and   administrative   support   costs    increased
$1.7  million to $35.1 million for the six months ended June  30,
1999  from  $33.4  million  for the same  period  last  year,  an
increase  of  5  percent.  Approximately  $1.6  million  of  this
increase was attributable to the increase in Global Core  Service
(GCS) costs over last year. The increase in GCS costs versus  the
same  period  last  year  included:  increased  expenses  in  the
internal  systems  and  human resources areas  of  $0.6  million;
higher  marketing  expenses  of  $0.9  million  as  a  result  of
increased  corporate marketing efforts; and  a  net  increase  in
various  other  costs of $0.3 million including corporate  legal,
finance  and investor relations costs. These costs were  slightly
offset  by  a decrease in corporate recruiting expenses  of  $0.2
million as a result of a reduction in headcount. The Company also
incurred  a  slight  increase of $0.1 million  in  practice  area
management  and  administrative  costs.   These  costs  primarily
included  additional  domestic regional management  and  practice
area  support personnel of $0.8 million offset by a  decrease  in
international expenses of $0.4 million and a decrease in  various
other   domestic  management  and  administrative   expenses   of
$0.3   million,  which  include  items  such  as  practice   area
marketing, recruiting, sales and other expenses.

Goodwill  amortization  increased to $2.6  million  for  the  six
months ended June 30, 1999 compared to $1.9 million for the  same
period last year. This increase reflects the effect of the  earn-
out  payments made during the seven month transition period ended
December  31,  1998 related to the acquisitions  of  The  Bentley
Company, Inc. and Aspen Consultancy Ltd.

On  March  30, 1999, the Company announced that it was  making  a

                              Page 19




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

number  of  changes to its business operations and, as a  result,
the  Company  recorded a restructuring charge  of  $10.5  million
associated  with those changes and the severance of approximately
300 people, primarily consulting personnel.

Incentive compensation of $9.7 million was accrued during the six
months ended June 30, 1999 compared to $4.4 million for the  same
period last year.  Incentive compensation as a percentage of  net
revenues increased to 6 percent for the six months ended June 30,
1999  compared to 3 percent for the same period last  year.   The
increase  was  primarily due to an increase in the bonus  accrual
for  non-vice president personnel, as well as an increase in vice
president  incentive compensation expense  as  a  result  of  the
Company meeting its performance targets for the six months  ended
June  30,  1999.  The  Company  expects  to  continue  to  accrue
incentive compensation throughout the 1999 calendar year.

Consolidated operating loss was $4.5 million for the  six  months
ended  June 30, 1999 compared with consolidated operating  income
of $22.4 million in the prior period, due to the reasons outlined
above. Excluding the restructuring charge, consolidated operating
income  was  $6.0 million during the six months  ended  June  30,
1999.   Operating income from the E-Solutions business was  $15.5
million  during  the six months ended June 30, 1999  compared  to
$26.7 million in the prior period, a decrease of 42 percent. This
decrease  was mainly due to a decrease in the demand for  certain
services in the E-Solutions business, lower staff utilization and
lower  billing rates. Operating income from the eLoyalty business
was  $15.8  million  during the six months ended  June  30,  1999
compared to $10.2 million in the prior period, an increase of  55
percent.  This  increase was primarily  due  to  an  increase  in
billing  rates  and  the increased demand for eLoyalty  services,
which was consistent with its higher revenues, offset in part  by
investments in product development.

Corporate  and GCS costs for the six months ended June  30,  1999
were $35.8 million compared to $14.5 million in the prior period,
an  increase  of 148 percent. The increase in corporate  and  GCS
costs  primarily  represents the restructuring  charge  of  $10.5
million  as  well  as  a change in the corporate  adjustment  for
incentive  compensation. For the six months ended June 30,  1998,
the  Company  did  not meet certain internal performance  targets
and,  accordingly, recorded a corporate adjustment to reduce  the
consolidated   incentive  compensation  accrual.   However,   the
Company  fully  met  its  internal  performance  targets  in  the
corresponding   1999   period  and,   therefore,   no   incentive
compensation   adjustment  was  needed.  In  addition,   goodwill
amortization  for  the six months ended June 30,  1999  increased
from the prior period due to the earn-out payments related to the
acquisitions  of The Bentley Company, Inc. and Aspen  Consultancy
Ltd.   Finally,  GCS costs also increased due to an  increase  in
management   and  administrative  support  costs,  as  previously
described.   Excluding the restructuring charge, GCS  costs  were
$25.3 million for the six months ended June 30, 1999, an increase
of 75 percent over the prior period.

Net  investment income for the six months ended June 30, 1999 was
$1.6  million compared to $1.3 million for the same period a year
ago.  The increase is a result of higher cash and cash equivalent

                              Page 20




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

balances for the six months ended June 30, 1999 compared  to  the
same period a year ago.

The  Company's  effective  tax rate  for  the  six  months  ended
June  30, 1999 was an 8 percent benefit compared to a 42  percent
provision  for the same period a year ago. The rate for  the  six
months ended June 30, 1999 was unusually low due to a portion  of
the  foreign restructuring charge being generated in  lower  tax-
rate  jurisdictions.  As the restructuring charge  accounted  for
the  pre-tax loss, the consolidated effective tax rate was  lower
this period than in the prior period.

Weighted  average  number of common shares outstanding  increased
primarily  due to the exercise of stock options and the  issuance
of  shares  under  the  Company's employee stock  purchase  plan,
partially  offset by the repurchase of treasury shares.  Weighted
average number of common and common equivalent shares outstanding
decreased because there were no share adjustments for the  effect
of  stock  options as the assumed exercise of options would  have
been antidilutive.

On  March  30,  1999, the Company filed and received  preliminary
comments  from  the U.S. Internal Revenue Service  regarding  the
proposed spin-off of the Company's eLoyalty business segment as a
non-taxable  distribution for U.S. federal income  tax  purposes.
The  Company  expects to offer not more than 20  percent  of  the
common  shares  of eLoyalty in an initial public  offering  (IPO)
during  the  late  fall  of  1999,  with  the  proposed  tax-free
distribution of the remaining eLoyalty shares held by the Company
in a spin-off to follow at a later date.

LIQUIDITY AND CAPITAL RESOURCES

Net  cash  provided by operating activities was $0.4 million  and
$4.2  million  for the six months ended June 30, 1999  and  1998,
respectively. Operating cash flow for the six months  ended
June 30, 1999 included the restructuring charge and other favorable
working  capital  activities.  This  benefit  was  offset  by  an
increase  in net receivables of $18.9 million mainly due  to  the
growth in eLoyalty's revenues as well as cash outlays related  to
the restructuring charge.

The  Company's significant amounts of cash, cash equivalents  and
marketable  securities  provide ample  liquidity  to  handle  the
Company's current cash requirements.

Net  cash  provided by investing activities was $0.4 million  for
the  six  months  ended  June  30, 1999.  The  Company  purchased
$1.5   million  of  available-for-sale  securities  and  received
$2.8 million from the sale of available-for-sale securities.  The
proceeds  from available-for-sale securities were transferred  to
cash  and  cash  equivalents and reinvested in  ongoing  business
activities.

Capital expenditures for the six months ended June 30, 1999  were
$0.9  million. Capital expenditures may continue at  the  current
rate throughout the 1999 calendar year. The Company currently has
no material commitments for capital expenditures.

                              Page 21




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

The Company has a $10.0 million unsecured line of credit facility
(the  "Facility") with Bank of America National Trust and Savings
Association   (Bank   of   America).   The   agreement    expires
October 4, 1999. At the Company's election, loans made under  the
Facility  bear  interest at either the Bank of America  reference
rate   or   the   applicable  Eurodollar   interest   rate   plus
0.75  percent. The unused line fee is 0.125 percent of the unused
portion  of  the commitment. The Facility requires,  among  other
things, the Company to maintain certain financial ratios.  As  of
June 30, 1999, the Company was in compliance with these financial
ratio requirements. As of June  30, 1999, no borrowings had  been
made under the Facility.

NEW ACCOUNTING STANDARDS

On June 15, 1998, the Financial Accounting Standards Board (FASB)
issued  Statement  of Financial Accounting Standards  (SFAS)  No.
133,   "Accounting   for  Derivative  Instruments   and   Hedging
Activities."  SFAS No. 133 is effective for financial  statements
issued  for  periods  ending after June 15, 2000.  SFAS  No.  133
requires  that  all  derivative instruments be  recorded  on  the
balance  sheet at their fair value. Changes in the fair value  of
derivatives are recorded each period in current earnings or other
comprehensive  income,  depending  on  whether  a  derivative  is
designated as part of a hedge transaction and, if it is, the type
of  hedge transaction. The Company anticipates that, due  to  its
limited  use of derivative instruments, the adoption of SFAS  No.
133  will not have a significant effect on the Company's  results
of operations or its financial position.

SUBSEQUENT EVENTS

On August 13, 1999, the Company sold 500,000 share of Common Stock
(the "Company Shares")  to  unaffiliated  investors  in  a private
placement  for  cash  proceeds  of approximately $4.5 million. The
investors have a single  demand registration right with respect to
the Company Shares, which  expires  twelve  months  after the date
of the purchase.

In   addition,   the   investors have committed  to  purchase for
$8.4 million approximately 5 percent of the number of common shares
(the "eLoyalty Shares") of the Company's wholly owned subsidiary,
eLoyalty Corporation,  that would be issued and outstanding after
the Company  completes  the  proposed transfer to eLoyalty of the
assets and liabilities of the  business historically conducted as
the Company's ECM division  (the "Asset Transfer"). The agreement
with  the   investors   provides  that  the prosposed purchase of
eLoyalty Shares is subject to the receipt  of a favorable revenue
ruling  from  the  Internal  Revenue Service  with respect to the
proposed tax-free spin-off of eLoyalty to the Company's stockholders,
the consummation of the Asset Transfer and certain other customary
conditions. The Company has agreed, pursuant to the agreement, to
use commercially reasonable efforts to effect the Asset  Transfer
as soon as is reasonably practicable after receipt of a favorable
revenue  ruling.  In  the  event  the  Asset  Transfer  is not so
consummated and the investors do not purchase the eLoyalty Shares,
the  Company  could   become   obligated  to  make  a  liquidated
damage payment of $1.2 million to the investors. Alternatively, if
the investors purchase  the  eLoyalty  Shares  and  the proposed
initial public offering  of  eLoyalty  common shares or the proposed
spin-off of eLoyalty does not occur within one year after the date
of the agreement, eLoyalty  could  become  obligated to repurchase
the    eLoyalty    Shares   then  held  by  the  investors  at  a
premium totaling $1.2 million over the price paid by the investors
for  such shares. The  agreement further provides that, after the
purchase  of the eLoyalty Shares, a representative of each of the
two  investor  groups  will be appointed to the eLoyalty Board of
Directors.


OTHER MATTERS

The Year 2000 issue is a general term used to address a class  of
problems  which are caused by the inability of computer  programs
to  recognize  various date values around January 1,  2000.  This
class   of   problems  could  result  in  a  system  failure   or
miscalculations causing disruptions of operations such as,  among
others,  a  temporary  inability to  process  transactions,  send
invoices, or engage in similar normal business activities.

The   Company  has  conducted  an  assessment  of  its   computer
information systems by inventorying related hardware and software
systems  and  has determined the nature and extent  of  the  work
required  to  ensure  that its internal  systems  are  Year  2000
compliant.  The majority of the software used by the Company  has
been  purchased  as  packaged software. A  minimal  customization
practice  has  been followed to support a more direct  transition
from  an  older version of a packaged software application  to  a
newer  version  of  the same application. The Company's  internal
systems  can  be  grouped into three principal categories  -  its
accounting and human resources software, its legacy systems  that
perform  a  variety  of  processes,  and  its  office  automation
software products. With respect to the suite of software products
licensed by the Company and relied upon in the administration  of
accounting  and human resources functions, which was licensed  by
the  Company  in the first quarter of its 1997 fiscal  year,  the
licensor has indicated that the version currently employed by the
Company is not currently Year 2000 compliant and, therefore,  the

                              Page 22




<PAGE>
                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

Company has replaced the production and development versions with
newer  ones  that are Year 2000 compliant. The Company  plans  to
apply  future patches to address the Year 2000 issue as they  are
made  available.  Based on currently available  information,  the
Company  believes the expense associated with these efforts  will
not  be  material.  The  Company expects that  additional  issues
concerning Year 2000 compliance will be reported by the  licensor
to  the Company and updates will be provided by the licensor. The
Company  has  received the most recent updates  and  enhancements
pursuant  to  a software support service agreement  presently  in
place with the licensor, an agreement which is in effect and that
the Company does not currently intend to terminate. Provided that
the  licensor  gives such assurances concerning the  updates  and
enhancements to its software product suite, the Company does  not
expect that it will incur additional expense aside from the  cost
of  the software support service agreement in order to bring  its
accounting  and human resources software package into  Year  2000
compliance.

Other important internal business processes of the Company,  such
as  time and expense reporting and labor distribution, (and their
associated  back-office  functions),  are  performed  by   legacy
systems that have been re-written to be Year 2000 compliant.  The
remaining  office automation products have been  inventoried  and
each  vendor  has  been  contacted for the  product's  Year  2000
status.   All identified products have either been upgraded  with
patches, entirely replaced, determined to be Year 2000 compliant,
or  shown  to  possess  no date-associated functions  within  the
product.  The Company estimates that it is nearly completed  with
the  compliance  project effort, and expects that the  identified
systems  will be compliant as of December 30, 1999.  The  Company
estimates that the cost associated with replacing/upgrading these
systems,  excluding labor costs, will be less than $0.3  million,
and  has  provided for the replacement of these  systems  in  its
operating and capital budgets for calendar year 1999.

Vendors of the standard software packages have been contacted and
patches  and/or  newer  versions of the  applications  have  been
secured.  Distribution of the patches and newer versions  of  the
software  will  occur  in the third and fourth  quarters  of  the
calendar year 1999.

Based  on  presently available information, the Company  believes
that  any  necessary compliance efforts concerning  its  internal
systems  will not have a material adverse effect on its business,
operating results and financial condition. However, if compliance
efforts  of which the Company is not currently aware are required
and  are  not  completed on time, or if the cost of any  required
updating,   modification   or  replacement   of   the   Company's
information  systems  exceeds the Company's estimates,  the  Year
2000  issue could have a material adverse impact on the Company's
business, operating results and financial condition.

In addition to the Company's internal systems, the Company relies
on  third  party  vendors in the conduct  of  its  business.  For
example, third party vendors handle the payroll function for  the
Company,  and  the  Company  also  relies  on  the  services   of
telecommunication  companies, banks,  utilities,  and  commercial

                              Page 23




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

airlines,  among  others. The Company has sought assurances  from
its  material  vendors  and  suppliers  that  there  will  be  no
interruption of service as a result of the Year 2000  issue,  and
to the extent such assurances have not been given, the Company is
finalizing  contingency  plans to mitigate  the  effects  on  the
conduct  of  the Company's business in the event  the  Year  2000
issue results in the unavailability of services. There can be  no
assurance  that  any contingency plans developed by  the  Company
will prevent any such service interruption on the part of one  or
more  of  the  Company's  third party  suppliers  from  having  a
material  adverse  effect  on the Company's  business,  operating
results and financial condition. In addition, the failure on  the
part  of the accounting systems of the Company's clients  due  to
the  Year  2000 issue could result in a delay in the  payment  of
invoices  issued  by  the Company for services  and  expenses.  A
failure of the accounting systems of a significant number of  the
Company's  clients would have a material adverse  effect  on  the
Company's business, operating results and financial condition.

The  Company  has generally refrained from performing  Year  2000
remediation  services for its clients. It is  possible,  however,
that former, present and future clients could assert that certain
services  performed by the Company from time to time involve,  or
are related to, the Year 2000 issue. The Company has recommended,
implemented and customized various third party software  packages
for  its  clients, and to the extent that such software  programs
may not be Year 2000 compliant, the Company could be subjected to
claims  as  a  result thereof. Since the Company's  inception  in
1988, it also has designed and developed software and systems for
its  clients.  Due  to  the  large  number  of  such  engagements
undertaken  by  the  Company over the  years,  there  can  be  no
assurance  that  all such software programs and systems  will  be
Year 2000 compliant, which could also result in the assertion  of
claims against the Company.

The Company's policy has been to endeavor to secure provisions in
its  client contracts that, among other things, disclaim  implied
warranties,   limit   the  duration  of  the  Company's   express
warranties, relate the Company's liability to the amount of  fees
paid by the client to the Company in connection with the project,
and disclaim any liability arising from third party software that
is implemented, customized or installed by the Company. There can
be  no  assurance  that  the  Company  will  be  able  to  secure
contractual protections in agreements concerning future projects,
or  that  any contractual protections secured by the  Company  in
agreements governing pending and completed projects will dissuade
the other party thereto from asserting claims against the Company
with respect to the Year 2000 issue.

Due to the complexity of the Year 2000 issue, upon any failure of
critical  client  systems or processes that may  be  directly  or
indirectly connected or related to systems or software  designed,
developed, customized or implemented by the Company as  described
above,  the  Company  may be subjected to claims,  regardless  of
whether  the failure is related to the services provided  by  the
Company. There can be no assurance that the Company would be able
to  establish that it did not cause or contribute to the  failure
of  a  critical client system or process. There also  can  be  no
assurance  that the contractual protections, if any,  secured  by

                              Page 24




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

the  Company  in  connection with any  past,  present  or  future
clients  will operate to insulate the Company from, or limit  the
amount of, any liability arising from claims asserted against the
Company.  If  asserted, the resolution of such  claims  (and  the
associated defense costs) could have a material adverse effect on
the   Company's   business,  operating  results   and   financial
condition.

                              Page 25




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

               MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            (Continued)
=================================================================

This  Form  10-Q  includes or may include certain forward-looking
statements that involve risks and uncertainties. This  Form  10-Q
contains   certain  forward-looking  statements  concerning   the
Company's   financial  position,  business   strategy,   budgets,
projected costs and plans and objectives of management for future
operations  as well as other statements including words  such  as
"anticipate," "believe," "plan," "estimate," "expect,"  "intend,"
and  other similar expressions. Although the Company believes its
expectations  reflected  in such forward-looking  statements  are
based  on reasonable assumptions, readers are cautioned  that  no
assurance can be given that such expectations will prove  correct
and  that  actual results and developments may differ  materially
from those conveyed in such forward-looking statements. Important
factors that could cause actual results to differ materially from
the  expectations reflected in the forward-looking statements  in
this  Form  10-Q include, among others, the pace of technological
change,  the  Company's ability to manage growth and attract  and
retain employees, general business and economic conditions in the
Company's  operating regions, market conditions  and  competitive
and  other  factors, all as more fully described in the Company's
Transition  Report on Form 10-K for the transition  period  ended
December  31, 1998 under Management's Discussion and Analysis  of
Financial   Condition  and  Results  of  Operations  "Assumptions
Underlying  Certain Forward-Looking Statements and  Factors  that
May Affect Future Results" and elsewhere from time to time in the
Company's  other  SEC  reports. Such  forward-looking  statements
speak  only as of the date on which they are made and the Company
does  not  undertake any obligation to update any forward-looking
statement  to reflect events or circumstances after the  date  of
this Form 10-Q. If the Company does update or correct one or more
forward-looking  statements,  investors  and  others  should  not
conclude  that  the  Company  will  make  additional  updates  or
corrections with respect thereto or with respect to other forward-
looking statements. Actual results may vary materially.

                              Page 26




<PAGE>

                  TECHNOLOGY SOLUTIONS COMPANY

                   PART II.  OTHER INFORMATION
===================================================================

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        TSC's 1999 Annual Meeting of Stockholders (the
        "Annual Meeting") was held on April 28, 1999.
        Represented at the Annual Meeting, either in person
        or by proxy, were 36,181,406 voting shares. The
        following actions were taken by a vote of TSC's
        stockholders at the Annual Meeting:

        1. Messrs. Michael J. Murray, Stephen B. Oresman and
           Raymond P. Caldiero were elected to serve as members of TSC's
           Board of Directors receiving 34,491,342, 30,027,000 and
           34,485,842 votes in favor of election, respectively, and
           1,690,064, 6,154,406 and 1,695,564 votes withheld, respectively.
           There were no votes against, abstentions or broker non-votes with
           respect to the election of any nominee named above.  In addition,
           the terms of office for Messrs. Purcell and Waltrip continue
           until the 2000 Annual Meeting, and Messrs. Kohler and Zucchini
           continue until the 2001 Annual Meeting.

        2. The appointment of PricewaterhouseCoopers LLP as
           independent auditors for TSC for its fiscal year ending December
           31, 1999 was ratified: 36,110,559 votes were cast for the
           ratification; 53,929 votes were cast against the ratification and
           there were 16,918 abstentions.  There were no votes withheld or
           broker non-votes.

ITEM 6 - EXHIBITS AND REPORT ON FORM 8-K

     (a)         See Exhibit Index







        All other items in Part II are either not applicable
        to  the  Company during the quarter ended  June  30,
        1999, the answer is negative, or a response has been
        previously reported and an additional report of  the
        information  is  not  required,  pursuant   to   the
        instructions to Part II.



                              Page 27




<PAGE>


                           SIGNATURES



Pursuant  to  the  requirements of Section 13  or  15(d)  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 on the 16th day of August 1999.



                            TECHNOLOGY SOLUTIONS COMPANY





Date:  August 16, 1999      By:    /s/ TIMOTHY P. DIMOND
                                   _____________________
                                       Timothy P. Dimond
                                  Chief Financial Officer










                              Page 28




<PAGE>


                  TECHNOLOGY SOLUTIONS COMPANY




                          EXHIBIT INDEX




     EXHIBIT
     NUMBER       DESCRIPTION
     --------     -----------

         4.1      First Amendment to Technology Solutions Company 1996
                   Stock Incentive Plan

         4.2      Technology Solutions Company
                   Non-Statutory Stock Option Agreement

         4.3      First Amendment to Technology Solutions Company 1995
                   Employee Stock Purchase Plan

        10.1      Employment Agreement of Timothy P. Dimond

          27      Financial Data Schedule











                              Page 29