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EXHIBIT 11.1  STATEMENTS RE COMPUTATION OF PER SHARE EARNINGS
                                      

                          Software Artistry, Inc.
        Exhibit 11 -- Statement Re: Computation of Earnings Per Share
             (dollars in thousands, except per share amounts)

<TABLE>
                                                                     Year Ended               
                                                                     December 31,             
                                                        ------------------------------------- 
                                                            1996         1995         1994    
                                                         ----------   ----------   ---------- 
<S>                                                     <C>            <C>         <C>        
Primary:
    Average shares outstanding                            6,742,244    5,968,685    2,500,633 
    Add common shares to be issued upon conversion  
     of Series A Redeemable Preferred Stock                      --      210,121    1,144,688 
    Net effect of dilutive stock options issued within 
     one year of January 17, 1995 (date of filing of 
     initial public offering) -- based on the treasury
     stock method using the higher of mid-point of 
     the proposed offer price or actual market price             --      282,349      230,197 
    Net effect of dilutive stock options not included 
     above -- based on the modified treasury stock 
     method using the average market price                  735,613      689,334      656,371 
                                                         ----------   ----------   ---------- 
    Total                                                 7,477,857    7,150,489    4,531,889 
                                                         ----------   ----------   ---------- 
                                                         ----------   ----------   ---------- 
    Net income                                           $    1,937   $    3,748   $    1,666 
    Deduct dividends on Series B, C, and D 
     Redeemable Preferred Stock                                  --          (31)        (166)
                                                         ----------   ----------   ---------- 
    Adjusted net income                                  $    1,937   $    3,717   $    1,500 
                                                         ----------   ----------   ---------- 
                                                         ----------   ----------   ---------- 
    Per share amount                                     $     0.26   $     0.52   $     0.33 
                                                         ----------   ----------   ---------- 
                                                         ----------   ----------   ---------- 
Fully diluted:
    Average shares outstanding                            6,742,244    5,968,685    2,500,633 
    Add common shares to be issued upon conversion
     of Series A, B, and C Redeemable Preferred 
     Stock                                                       --      453,456    2,470,321 
    Net effect of dilutive stock options issued 
     within one year of January 17, 1995 (date of 
     filing of initial public offering) -- based 
     on the treasury stock method using the higher
     of mid-point of the proposed offer price,
     actual market price, or period end market price             --      267,457      230,197 
    Net effect of dilutive stock options not included 
     above -- based on the modified treasury stock 
     method using the period end market price               735,613      704,314      848,549 
                                                         ----------   ----------   ---------- 
    Total                                                 7,477,857    7,393,912    6,049,700 
                                                         ----------   ----------   ---------- 
                                                         ----------   ----------   ---------- 
    Net income                                           $    1,937   $    3,748   $    1,666 
    Deduct dividends on Series D Redeemable 
     Preferred Stock                                             --           (8)         (42)
                                                         ----------   ----------   ---------- 
    Adjusted net income                                  $    1,937   $    3,740   $    1,623 
                                                         ----------   ----------   ---------- 
                                                         ----------   ----------   ---------- 
    Per share amount                                     $     0.26   $     0.51   $     0.27 
                                                         ----------   ----------   ---------- 
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