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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

     Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
                           Commission File No.00-24055

                            DA CONSULTING GROUP, INC.
               (Exact name of registrant as specified in charter)

           TEXAS                                              76-0418488
(State or other jurisdiction                         (IRS employer incorporation
      of  organization)                                   identification No.)

    5847 SAN FELIPE, SUITE 1100
          HOUSTON,  TEXAS                                       77057
(Address  of principal executive office)                      (Zip Code)


       Registrant's telephone number, including area code: (713) 361-3000

          Securities Registered Pursuant to Section 12(b) of the Act:
                                      NONE

           Securities Registered Pursuant to Section 12(g) of the Act:

                                Title of Class:
                                ---------------
                    COMMON SHARES, PAR VALUE $.01 PER SHARE

     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  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  Registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K  [ ].

     As  of  April  11, 2002 the aggregate market value of the voting stock held
by  non-affiliates  was $4,820,466.
     As  of  April  11, 2002, 8,418,604 shares of common stock were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE


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<PAGE>
<TABLE>
<CAPTION>
                            DA CONSULTING GROUP, INC.
                                    FORM 10-K

                                TABLE OF CONTENTS

                                                   PART I

<S>         <C>                                                                                    <C>
Item 1.     Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
Item 2.     Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 3.     Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 4.     Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . 13

                                                   PART II

Item 5.     Market for the Registrant's Common Equity and Related Stockholder Matters. . . . . . . 14
Item 6.     Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations  15
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . 21
Item 8.     Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . 21
Item 9.     Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . 21

                                                 PART III

Item 10.    Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . 21
Item 11.    Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Item 12.    Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . 26
Item 13.    Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . 28

                                                 PART IV

Item 14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . . . . . . . . . 28

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>


                                  Page 2 of 51
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                                     PART I

ITEM  1.  BUSINESS

     DA  Consulting Group, Inc. ("DACG" or "the Company") is a global consulting
firm  specializing  in  learning solutions, employee education, business process
mapping,  business process  improvement, and support for effective change.  From
its  offices  in  America,  Canada,  the  UK,  France,  Germany,  Singapore  and
Australia,  DACG  enables  clients to use technology and improve productivity by
managing  and  changing  what  their  employees  know.

     DACG's  core  business  is:

     Process  documentation  and  business  process  mapping
     Business  process  improvement
     Training  for  system  implementations
     Change  communication
     Organizational  learning  solutions
     Employee  performance  support
     E-learning  within  an  organization

MANAGEMENT  OF  DACG

     Significant  changes  in  the management of DACG took place in August 2001.
The  officers  of  the  Company  are:

     Chairman                   Dr. B K Prasad
     President & CEO            Virginia  L. (Val) Pierpont
     Chief Financial Officer    Dennis  Fairchild
     Chief Operating Officer    Malcolm  Wright

     The  Company  was  founded  in  1984 in Houston, Texas by Val Pierpont, who
resumed the CEO role in August 2001.  Offering documentation services to the oil
and gas industry, it participated in the early implementations of ERP systems in
that  sector.  End-user  training  was a natural extension of its core expertise
and  was  added to the Company's portfolio in 1989.  DACG was well positioned to
take  advantage  of the demand for ERP expertise when that market emerged in the
l990's.  In  particular,  there  was  strong  demand  for  its  services  in SAP
implementations.  The  new  systems  were as demanding as they were powerful and
DACG created a specialist niche for itself in customized documentation, training
and  change  communication  in  the  Global  2000  market.

     The  decade  from  1988  through 1998 was marked by explosive growth in the
Company.  In the five years from 1993 to 1998 the average rate of growth was 80%
per  annum.  DACG  developed  several  proprietary  tools  in  this period which
captured  its  knowledge and expertise. Today these continue to help the Company
deliver  consistently  high standards of work at significant savings in time and
cost  including  the  following:

     DA  Passport,  a  contact  sensitive  employee  performance  support system
     DA  Learning  Center,  a  web-enabled  repository  for  all  components  of
     corporate  learning
     DA  Cornerstone,  proprietary  methodology
     DA  Foundation,  proprietary  content  and  reference  materials
     DA  Reporter,  a  tool  for  measuring  training  effectiveness.

     DACG  is continuing its work with Customer Relationship Management systems,
in  particular,  Siebel,  Vantive  and  SAP.  The Company has also significantly
expanded  its  work  in  the  Public  Sector.

MARKET

     DACG participates in three marketplaces - education, software support tools
and  documentation  and  training for ERP (enterprise resource planning) and CRM
(customer  relationship  management)  systems.  According  to  industry experts,
these  markets  had  a combined value in excess of $8 billion worldwide in 2001.
It  is  expected  that  they will continue to grow at double digit rates for the
near  future.  There  are  many  service providers in the education and end-user
support  markets.  The providers who compete directly with DACG include software
developers,  computer  training  companies,  consulting  firms  and  e-learning
companies.  There  is  also  competition  from  large  international  system
integrators  and  technology  vendors who provide end-user support programs with
their  proprietary  software.


                                  Page 3 of 51
<PAGE>
     DACG's  ability  to  increase  revenues  in  the  ERP  and CRM training and
documentation  markets  is  dependent  upon the license sales of the ERP and CRM
software.  The  Company  believes  the  turndown  in  the ERP marketplace in the
second  half  of 1999 through the first half of 2000 was caused by the diversion
of customers' resources to Y2K compliance.  This had a decidedly negative impact
on  the  demand  for  DACG's  services.  The  current trend in the ERP market is
towards  system  upgrades  which  incorporate  internet capability, linking back
office  functions with the front office and the extended enterprise.  In Europe,
growth  in the ERP market has been partially driven by the need for companies to
comply  with  European  Union  regulations.

     Most of DACG's current revenue is earned in upgrades to ERP systems and new
implementations  of  CRM  systems.  There  is  also steady growth in the sale of
DACG's  proprietary  software,  including  EPSS  (electronic performance support
systems)  and  computer  based  training  systems.

     New  market  opportunities  for the Company will come with the expansion of
e-Learning.  A significant investment by DACG in e-Learning software was made in
2000  and  2001 building a proprietary software system called Dynamic IQ. It led
to  the  development  of  two  new  software  tools,  The Learning Center and DA
Reporter.  Both  of  these  have  been  well  received by the market and provide
excellent  value  in  generating  new  customer  relationships as well as useful
revenues.  Dynamic  IQ  itself  is  currently  for  sale.

BUSINESS  STRATEGY

     DACG's mission is to support Global 2000 customers who seek to improve what
their  employees  do  by  managing  and  changing  what  their  employees  know.

     DACG will grow a strong and healthy business offering its core expertise to
the  Global  2000.  It will continue to be the leader in its niche by respecting
and  nurturing relationships with its clients.  New developments and new markets
will  be  pursued if they are a natural extension of our core skills and offer a
good  return  on  investment.   DACG  management will focus on cash profits as a
measure  of  its  success  as  custodian  of the business, and will at all times
protect  the  interests  of  both  the  shareholders and the stakeholders in the
Company.

     New  initiatives  for  the  Company  are  the  Global  Account  Program and
Strategic Alliances and Partnerships. Both of these are driven by an interest in
looking  after our clients as completely as possible. DACG management believes a
prosperous  future  for  the Company can only be secured by linking its goals to
the  best  interests  of  its  clients.  Therefore, these programs are important
vehicles  for  growth  in  the  future.  The Company has announced the following
alliances  and  partnerships  with  AXON,  Global  Knowledge  and  X-Help.

Maintain  Independence  and  Leverage  Existing  Client  Relationships

     The  Company  provides  its consulting and software services independent of
the  ERP,  CRM  and  e-Learning  solutions  providers.  The Company provides its
customers  with  solutions that are best suited to their environment, budget and
technical  preferences.

     Since  1984  ,  DACG  has  provided services to more than 650 of the global
Fortune  2000  companies.  DACG's  strategy  is  to  continue  to  develop these
relationships,  particularly  as  they  seek  to  become  continuous  learning
organizations.  Relationships with these companies have been an important source
of  business  leads  and  referrals.  During  2001,  approximately 84% of DACG's
business  came  from  previous or existing customers.  The Company believes that
its  brand  recognition  and  reputation  are important assets in its market and
differentiate  it  from  its  e-Learning  competitors.

Diversify  into  e-Learning

     The  lessons learned in 2001 taught us  that the market is not receptive to
full scale Learning Management Systems (LMS).  While everyone can appreciate the
benefit  of  LMS, very few are willing to inflict on their business the cost and
disruption  that  an  LMS  implementation  entails.

     DACG  has  found  ready  acceptance  for  The  Learning Center, its on-line
repository  for  learning  and  support content which sells at a fraction of the
cost of a full scale LMS. The Learning Center is simple and painless to install;
it uses content that DACG has already developed over the course of a project. It
differs  from an LMS in that it only affects employees who will be end-users. In
the course of a typical project, DACG will have already done significant work in
Change  Management for these people, and that can be re-cycled into The Learning
Center.


                                  Page 4 of 51
<PAGE>
     The  corporate  e-Learning  marketplace  is  currently estimated to be $1.7
billion  in  the  U.S.  alone  and is forecasted to grow to $11 billion by 2003,
which  is  an  estimated  compound  annual  growth rate (CAGR) of 65%.  Industry
estimates  put the European marketplace for e-Learning services at $4 billion by
2004.  The  Company expects to see continued growth in its software tool market,
both  its  own  and  those  of  its  Alliance  Partners.

PRODUCTS  AND  SERVICES

     The  Company  delivers  employee  support  solutions designed to secure the
return  on  information  technology  investments  of  its clients that take into
account  an  organization's  individual  needs, resources, and requirements. New
technology  has a significant impact on the business processes of a corporation.
Managing  a  smooth  transition  during  the implementation of a new system, and
providing  support  for  end  users  in  the  future  is  essential.

     DACG  reviews  the  procedures and tasks that client employees will need to
learn  once  the  new  system is in place and incorporate them into the end user
support.

     DA Passport provides on-line context sensitive end-user support, customized
to  individual  jobs.

     DACG's proprietary methodology, DA Cornerstone(TM) supports all the project
work  undertaken  by  the  Company.

Learning  and  Change  Management

     Change  management  is  another  DACG  deliverable.  Companies transforming
themselves  into  continuously  learning organizations commit themselves to long
term  change.  Clients'  employees are affected by this change, seeing it on the
desktop  in new software and in day-to-day business activities in new procedures
and  policies.  A  first  step in managing this change is establishing executive
management  support. However, the real key to successful cultural transformation
is  eliciting  the  support  of  employees, as well as those within the extended
enterprise,  such  as  customers  and  suppliers.  Effective  utilization of new
technology  is  critical  to  the  success  of the learning organization. Common
change  management  deliverables  provided  by  the  Company  include  kick-off
meetings,  speeches,  facilitated  collaborative  work  groups,  multimedia
presentations,  video  presentations,  and  newsletters.  These deliverables, in
addition  to  providing  critical  information,  help to ensure a successful and
ongoing  cultural  transformation.

Education

     The Company develops educational programs customized to individual client's
needs,  taking into account the client's infrastructure and resources, the scope
of  the  client's  information  technology  system,  language  and  cultural
requirements.  In order to influence the way an employee works while getting the
best out of a new system, DACG develops training programs that focus on specific
end-user  job  responsibilities,  as well as the overall business processes that
impact  the  end-user.  DA  Foundation is a library of training content material
collected  over  the  years  that  the  Company  can draw on for these projects.

     The  Company  consults  with the client to determine the appropriate format
for  delivering  training  such  as  instructor-led  training,  computer-based
training,  and  e-Learning.  Most clients choose a combination of instructor led
and  on-line  training,  supported  by  DA  Passport  and  The  Learning  Center
post-implementation.

     Many  companies, particularly those with large and geographically dispersed
operations,  are  increasingly  seeking  ways  to use computer-based training to
decrease  costs  and  minimize employee time away from the job. DACG offers both
custom  and  off  the  shelf  computer-based  training  modules.

     DACG  offers  both  synchronous  and  asynchronous  capabilities  for
computer-based distance learning. Using Symposium software from Centra Software,
Inc.,  DACG  provides  synchronous  distance  learning,  where many students can
follow  a  single  event.  DACG  provides asynchronous distance learning through
custom  and  SmartForce courses that allow students to work independently and at
their  own  pace.  Both  of these methods are used by companies with remote user
audiences  and require only basic information technology infrastructures because
they  involve  distributing  content  by  wide  area  networks  (WAN), corporate
intranets,  and  audio conferencing technology.  Typically a client implementing
an  ERP  system  or  another  new  business  technology  will  have the required
infrastructure  already  in  place.  E-Learning is effective in situations where
travel,  time  away  from  work  and  cost  are  important.


                                  Page 5 of 51
<PAGE>
Performance  Support

     A  critical  component  of  the  Company's end-user support solution is the
documentation of business processes. DACG's documentation is designed to support
employees  during training and after implementation.  The best support should be
readily  accessed on-line without interrupting the task in hand because the real
cost  of  training  is the cost of time off the job.  Giving an end-user exactly
the information required to perform a specific procedure is crucial to getting a
return  on  investment  from  a  new  system.

     DACG  consultants work with each client to assess ongoing documentation and
performance  support  needs  of  the  particular audience of end-users. Using DA
Foundation as a resource, the Company develops support content, creating clearly
defined  policies,  processes,  and procedures which the end user will follow in
the  future  in  conjunction  with  the  new  technology.

     More  sophisticated  performance  support  solutions  are delivered via the
client's  corporate  intranet.  Clients  are  offered  a choice of support media
according  to  need,  budget  and  time constraints.  Quick reference guides and
printed  documentation  in  hard  copy are used less often, but can be useful in
certain  circumstances.

     DA  Passport  is  the  Company's  electronic  performance  support  system
("EPSS").  It  provides  comprehensive  end-user support on-line at the desktop,
minimizing  interruptions to end users.  DA Passport is context sensitive, which
means  it  can  track the location of end-users in the client's ERP system.   It
provides  support  on  a  particular application in use at transactional or task
level.  DACG  can  link  system  tasks,  business  procedures,  training,  and
computer-based  training  files to ERP transactions using DA Passport technology
to  provide  sophisticated  support  to  end-users.

CLIENTS  AND  REPRESENTATIVE  ENGAGEMENTS

     The Company provides custom support solutions around the world to large and
mid-sized  companies,  many  of  which have information intensive, multinational
operations.  The  Company  has  provided  services  to  more  than  685 clients,
including  many  of  the  world's  leading  corporations  in  a  broad  range of
industries,  including  oil  and  gas,  information  technology, pharmaceutical,
chemicals,  utilities, telecommunications, consumer products, and manufacturing.
The  following  is  a  selection  of  DACG's  2001  clients  and  representative
engagements.

     The  Company's  ten  largest  clients,  in  the  aggregate,  accounted  for
approximately  38%,  55%  and  61% of its billed hour revenue in 1999, 2000, and
2001,  respectively.  One  client  accounted approximately 18% of the Company's
revenue  in  2001.

UNILEVER

     Unilever  is  one  of  the  largest consumer goods businesses in the world.
Unilever  operates  with  two  global  divisions:  Unilever  BestFoods whose top
performing  categories  are  Spreads,  Dressings and Leaf Tea, and include brand
names  such  as  Flora, Lipton and Knorr; Unilever Home and Personal Care, whose
broad  range  of  categories  includes  fabric  cleaning, deodorants, oral care,
household  cleaning,  and  hair  care  with  brand names such as Dove, Domestos,
Timotei  and  Persil.

     Each  of  these  divisions  is  implementing  and upgrading SAP and DACG is
providing  the  education  solution  for  both.  By  adopting common information
systems  and sharing best practices Unilever will achieve better cost-control as
well  as visibility of costs. All in all, Unilever intends that the introduction
of  common business practices and systems will support profitable growth for the
Company.

     DACG  was  awarded  Gold  at  the 2002 IT Training Awards, for working with
Unilever  providing  education  solutions.  The  multilingual  project  included
delivery in seven different languages to countries across Europe and encompassed
cutting-edge  technology, change communications, innovative training and support
techniques,  and  strong  project  management.  DACG  developed  a  tailor-made
electronic  performance support solution using DA Learning Center, a web-enabled
flexible  learning  management  tool to deliver custom training programs to over
20,000  employees.  DACG  used  a  sophisticated context-sensitive end-user help
tool,  DA  Passport,  that  delivers customized business process and application
support  on demand to the employee's desktop.  The repository provides access to
role-based  business  processes,  mapped  by  DACG,  designed  to  increase user
productivity.

DIAGEO

     Diageo,  the  world's  leading  player  in the premium drinks industry, was
formed out of the 1997 merger of Guinness and GrandMet. The move amassed a large
number  of  premium  brands,  such  as  Guinness,  Smirnoff, Baileys and Johnnie
Walker.


                                  Page 6 of 51
<PAGE>
DACG  was contracted by Diageo Business Services (DBS) in May 2001 as a training
partner  to  develop  an  on-line learning solution, to support business service
centres  within Europe and North America, as well as other business units within
these  regions.  DBS  is  responsible  for  creating  effective  global  process
solutions  for  finance  and  HR  functions,  such  as  dealing  with customers,
suppliers and employees, paying bills and taking orders. The project encompasses
implementation  of  SAP 4.6, PeopleSoft 8.s and Concur (Travel and Entertainment
software).

     A  detailed  training needs analysis revealed that a new solution had to be
developed  to  manage  and  store  all  the  business  process documentation. DA
Learning  Centre  was  used  to  create  documentation from the system blueprint
facilitating  use  of  an  online  help  system  called  DA  Passport.  On  line
simulation  lessons  are  delivered  using  the web-enabled front end. Classroom
training is delivered from the same materials.  Competencies are checked by post
training  tests  and  role  playing business scenarios. The results are analyzed
using  DA  Reporter.  The  worldwide  program will be delivered to around 15,000
people  and each training implementation will be customized to suit the needs of
the  specific  individual  market.

GlaxoSmithKline

     GlaxoSmithKline  (GSK)  is  a  world  leading research-based pharmaceutical
company  in  four  major  therapeutic  areas  - anti-infectives, central nervous
system  (CNS), respiratory and gastro-intestinal/metabolic. In addition, it is a
leader in the important area of vaccines and has a growing portfolio of oncology
products.  GSK's  mission  is  to  improve the quality of human life by enabling
people  to  do  more,  feel better and live longer.  Headquartered in the UK and
with  operations  based  in  the US, the company is one of the industry leaders,
with  an  estimated  seven  per cent of the world's pharmaceutical market.   The
company  also  has  a  Consumer Healthcare portfolio comprising over-the-counter
(OTC)  medicines,  oral  care products and nutritional healthcare drinks, all of
which  are  among the market leaders.  GSK has over 100,000 employees worldwide.

     GlaxoSmithKline  realized  the  need  to  upgrade their enterprise resource
planning  system,  SAP,  and  turned  to  DACG  to  support  them  for  their
end-user-training program from SAP R/3 to version 4.6. DACG performed an initial
training  needs  analysis  and developed a targeted training concept, delivering
documentation  solutions  with  the  use  of  help  cards  and  bespoke training
workshops  aimed  at ensuring staff self sufficiency and a high knowledge of the
system.  DACG  also  produced  customized  courses,  reference-based  training,
workshops  and  technical  and  instructional  post  go-live  support.

BHP  Billiton

     BHP  Billiton  is  a new global leader in the resources industry, employing
more  than  60,000  staff across more than 30 countries.  BHP Billiton conducted
the  GSAP  project  to  deploy  a global SAP solution as a key enabler of future
business  benefits.

     DACG was engaged as a key element in developing the knowledge and education
solution  to  support  the GSAP project.  DACG consultants were responsible for:

     -  supporting  and  developing  the  Knowledge  Warehouse  infrastructure
     -  design  and  development  of  comprehensive  training  courseware
     -  training  support  and  delivery  to  BHP  Billiton  sites  world  wide

     BHP  is  in  the process of successfully deploying the global SAP solution,
with  the  education  and  knowledge  program  a  cornerstone  of  that success.

Normandy  Mining

     Normandy  Mining  is one of the world's leading gold mining and exploration
companies.  An  SAP 4.6 upgrade created a challenge to develop a sustainable and
effective  SAP  learning  and  support  environment.

     DACG  was  engaged  to develop this environment.  Specific responsibilities
included:

     -  creating  effective  on-line  training  courses  and  workshop  agendas
     -  developing  SAP  system  simulations  using  SAP's  iTutor  tool
     -  implementing  a  web-based  Performance  Support  capability
     -  developing  and  delivering  appropriate  communications  material

     The  SAP  4.6  upgrade  was  achieved  successfully  and Normandy now has a
learning  and  performance  support  foundation  to  encourage  innovation  and
improvement  of  job  skills.


                                  Page 7 of 51
<PAGE>
     The  following  is  a  sample  list  of  clients  that the Company provided
services  for  during  2001:

<TABLE>
<CAPTION>
<S>                                      <C>                              <C>
24 Seven Utility services                Edeka                            National Australia Bank
BBC                                      EuroDisney                       Normandy Mining
BHP Billiton                             Fairchild-Dornier Gmbh           PaperlinX
BNFL                                     Georgia Pacific                  Perrier
Abbott Laboratories                      Gillette Australia               Phillips Fox
Agriculture Fisheries & Forestry (AFFA)  Guinness                         Phillips Petroleum
Air Products                             Hampshire County Council         Promodes
Australian Defence Organisation          Karstadt                         RMC Limited
Aventis Pasteur                          Kimberly-Clark Australia         Robert Bosch Australia
Basell International                     Lkinikum                         Sydney Ports
Bic                                      Media Accounting Services        Toyota Australia
Centrelink                               Merck Sharp & Dohme              UDV Diageo
Citibank                                 NSW Dept. of Community Services  UK College of Environment & Transport
Compaq                                   NSW Dept. of Transport           Unilever
Dun & Bradstreet                         NSW Roads & Traffic Authority    Woolworth's
</TABLE>

COMPANY  ORGANIZATION  AND  PROJECT  MANAGEMENT  METHODOLOGY

Organization

     The  Company  has  three principal operating divisions: the Americas, which
includes  the USA and Canada;  Europe, which includes the UK, France and Germany
as  well  as  mobile  services  provided  in  other European countries; and Asia
Pacific,  which includes operations in Australia and Singapore as well as mobile
services  provided  in  Asia.

     Within  each  division  there  are  administrative, sales and marketing and
operations  functions.  Administration  consists of finance, human resources and
management  information  services.   Operations performs all of the functions of
the  consulting  services  and  product  implementation  and  support.

     The  Company  has  two  corporate  functions:  research and development and
corporate  management.  Research  and  development  is  responsible for on-going
support  of  software  products  as  well  as  the  development of new products.
Corporate  management  consists  of  the  offices  of  the  CEO,  CFO,  and COO.

Project  Methodology  Management

     The  Company's  DA  Cornerstone(TM)  project  management  methodology  is
essential  to its delivery of quality end-user support solutions. DA Cornerstone
is  a  comprehensive  six phase, end-user support methodology that addresses key
end-user support program deliverables, activities, and milestones throughout the
lifecycle  of  a  business information technology implementation. Each phase has
associated  tools that facilitate the completion of activities and deliverables.

     DA  Cornerstone  phases  include:

Analyze:       DACG  analyzes  the client needs, resources, and requirements and
               submits  to  the client an end-user support strategy and proposed
               deliverables  for  approval.

Prototype and  When  the strategies are approved, DACG designs, deliverables and
Designs        establishes  appropriate  development strategies. The client must
               approve  the  strategic  program  design.

Develop:       DACG  executes the strategies and submits all deliverables for
               frequent  internal  and  client  review.


Implement:     DACG  delivers  the  final  work  to  the  end-users.

Evaluate:      After  implementation  and  as  part  of  the services to the
               client,  DACG  evaluates  the effectiveness of the services using
               appropriate  tools.


                                  Page 8 of 51
<PAGE>
Support:       DACG  will  arrange  and  set  up  the post implementation and
               long-term  maintenance  strategy  for  the  educational  program,
               end-user support, change communications or other programs created
               by  DACG  for  the  client.

     The  Company's  project  staff  develops  each  end-user  support component
through  an  iterative  draft  and  review process that directly involves client
end-users  in  the  development  of content specific to their needs. This review
process  typically  consists  of  three  stages  and  has  quality control steps
embedded  in each stage as formal checkpoints. These checkpoints are intended to
ensure  that  the client is satisfied with the deliverables, that the content is
accurate  and  adheres  to  the Company's own standards, and that the project is
delivered  in a cost-effective and timely manner. The success of a given project
engagement  from  a  cost,  time,  and  client  satisfaction  standpoint  is the
responsibility  of  the  assigned  operations  and  project  managers.

SALES  AND  MARKETING

     The  Company  generates  business  through  a  field sales force that sells
directly  and  pursues referrals and trade show leads.  In addition, the Company
co-markets,  sometimes  in  joint  sales calls and marketing materials, with its
Alliance  Partners.

     The  Company's  direct sales efforts are the responsibility of 23 full-time
sales  and  marketing  personnel,  most  of whom have either a local or regional
territory.  The  sales  personnel generate leads from several sources, including
referrals  from  the  Company's existing clients and from attendance at industry
trade  shows.  The  Company  also uses Internet-based marketing, tele-marketing,
direct  mail,  corporate  presentations,  joint marketing events, and networking
through  regional  business  communities  to  generate potential sources for new
business.  In 2002, the Company plans to focus its marketing on the ERP, CRM and
e-Learning  marketplaces.

     DACG  is  recognized by SAP, PeopleSoft, and J.D. Edwards as a preferred or
qualified  provider of end-user support services. DACG is recognized as a Global
Consulting Partner and a mySAP.com Global Consulting Partner by SAP and a Global
Education  Services  Alliance  Partner by PeopleSoft. The Company also maintains
partnerships  with  integrators  and providers of tools for use in documentation
and  training  such as Global Knowledge, X-ayce InterWise, X-Help and Axon.  The
Company  develops  and  delivers to potential clients proposals in collaboration
with  Strategic  Alliance  Partners,  including   proposals  covering  software
applications,  software implementation services, and end-user support solutions.
During  2001,  DACG  continued  to  expand  its capability to develop and manage
partnerships.  In  this  capacity,  DACG  plans  to create revenue from partners
selling  DACG  products  and services and by DACG reselling partner products and
services.

     The  Company's  services  require  a  substantial  financial  commitment by
clients  and,  therefore,  typically  involve a long sales cycle. Once a lead is
generated,  the  Company  needs  to  understand  quickly  the potential client's
business  needs  and objectives in order to develop the appropriate solution and
bid  accordingly.  The  Company's  operations  and project managers are involved
throughout  the  sales  cycle  to  ensure  mutual understanding of client goals,
including  time  to  completion and technological requirements. Sales cycles for
end-user  support  solution projects typically range from one to six months from
the  time the Company initially meets with a prospective client until the client
decides whether to authorize commencement of an engagement. The retention of the
Company  typically  occurs at the beginning of the design/prototype stage of the
software  implementation.

RECRUITING  AND  PROFESSIONAL  DEVELOPMENT

     As  of  February  28,  2002,  DACG's  personnel  consisted  of 212 billable
employees,  23  sales  and  marketing  personnel,  2  development  staff  and 32
administrative  employees.  The Company believes that its success depends on its
ability  to  attract,  retain, and motivate talented, creative, and professional
employees  at all levels. For core business, the Company seeks to hire personnel
with  prior  consulting  experience  in  end-user  education programs, education
professionals  with  a  background  in  information  technology, and information
technology  professionals  with  education  or communication program experience.
Strong  project  management,  analytical  and  communications  skills  and
international  experience  are  also  considered.  Recruiting  is  coordinated
Company-wide  through  the  Company's  human  resources  department.

     Training  and  mentoring  are  integral  parts  of  the  Company's  staff
development  program.  The  Company's  training  programs  ensure  that  its
professional  staff  understands  the impact of technology on people, is able to
communicate  effectively at all levels within a client organization, and has the
ability  to  communicate  with  its  clients' technical, business and management
staff  to  provide value-added content to its clients. Ongoing training includes
in-house  and external training. In-house training includes basic training, more
detailed  software  education,  project  management,  consultancy  skills,  and
leadership  training.  The use of DA Foundation materials and the application of
performance support technologies such as DA Passport and The Learning Center are
also  covered.  In  addition,  all  consultants  are  required  to  attend  a DA
Cornerstone  methodology training program, and to be approved for its use before
being  assigned  to  any  consulting  project.


                                  Page 9 of 51
<PAGE>
     The  Company believes that its culture is central to its ability to attract
and  retain  highly  skilled  and  motivated professionals. Extensive technical,
management,  and sales training enable DACG professionals to expand their skills
and  attain  increasing  levels  of  responsibility within the organization. The
technical  career  path  provides  opportunities  for  advancement  outside  the
traditional  management  career  ladder.  The  technical  career  path  builds
technical  skills,  provides  compensation  incentives,  and  at  a macro level,
supports the development of DACG's current and future core competencies. Through
planned  job  assignment  and  rotations,  special  projects  and  structural
development  events, high potential management candidates are prepared to assume
greater  management  roles.  The Company attracts and motivates its professional
and  administrative staff by offering competitive packages of base and incentive
compensation  and  benefits.  All  professional  staff  members are eligible for
bonuses.  The  Company appreciates the importance of recognition and a promotion
track  for  its  administrative  staff  and  fully integrates its staff into the
conduct  of its business. All of the Company's employees are eligible to receive
stock  options.

     During  2000,  the  Company  rolled-out  its  internal  implementation of a
learning  management  system,  eCampus,  based  on  its  Dynamic  IQ  platform.
Additionally,  the  company  is  providing  employees  with  access to SkillSoft
courses  as  part  of  its  commitment  to  distribute  SkillSoft  content.  All
employees  have  received  training  on  e-Campus  and  are  developing personal
development  plans,  including  mentoring  programs.

RESEARCH  AND  DEVELOPMENT

     DACG  established  a research and development department in 1995 to support
and  maintain its end-user support content and consulting methodologies.  During
2001  the  primary focus was on the modification of tools to work with a broader
range  of  software.  During  2000, the primary focus of this department was the
development  of  Dynamic  IQ,  a virtual learning environment with complementary
consulting  services and ongoing maintenance of DA Passport, DA Foundation,  the
Company's  proprietary  toolset  used  for  rapid deployment of end-user support
solutions.

     The  Company's  research  and  development  department  continually applies
technology  developments  to  the  Company's  content  and  tools. As technology
advances,  DACG  has kept pace, expanding its deliverables from traditional hard
copy  materials  and  instructor  led training to include on-line documentation,
multimedia  training,  employee  performance  support  systems,  e-learning  and
web-based education and performance support solutions. The Company will maintain
its  commitment  to  innovative  and  collaborative research and development and
anticipates  a  broadening  of  this  function  through  partnering  in  2002.

COMPETITION

     The  global  markets for end-user performance support services for business
information  technology  and  e-Learning  services are large, highly fragmented,
change  rapidly,  and  are  subject  to  low barriers to entry. DACG has various
market  areas  for  competition,  including:

-    Competition  from  the  ERP  software  developers  and  other  applications
     developers,  which includes the software that DACG trains on, including SAP
     and  other  vendors;
-    Competition  from  large  international  systems  integrators,  such as the
     consulting practices of the large international accounting firms, which are
     focused  principally  on  systems  integration  and implementation but also
     provide  end-user  support  as  a  secondary  service;
-    Competition  from the professional services groups of many large technology
     and  management  consulting  companies  and  a  large  number  of  smaller
     organizations  that  specialize  in  employee  support  services, generally
     serving  a  limited  geographic area and having a smaller base of technical
     and  managerial  resources;
-    Competition  if  clients  elect  to use internal resources to satisfy their
     needs  for  training  services  the  Company  provides;  and
-    In  e-Learning,  the  Company  faces a number of competitors in the form of
     software start-ups, established software companies and consulting companies
     as  well  as  other  niche  operators.

     In all markets, DACG faces competition for client assignments from a number
of  companies  having  significantly  greater  financial,  technical,  marketing
resources  and  name  recognition.  The Company believes key competitive factors
forming the basis upon which these companies compete are experience, reputation,
industry  focus,  international  presence, service and technology offerings, and
price  relative to the value of the services provided. The Company believes that
it  competes  effectively  and  will  continue to compete effectively worldwide.


                                  Page 10 of 51
<PAGE>
INTELLECTUAL  PROPERTY  AND  OTHER  PROPERTY  RIGHTS

     The  Company  relies  upon  a  combination  of  nondisclosure  and  other
contractual  arrangements  and  trade  secret  laws  to  protect its proprietary
rights.  The  Company  generally enters into confidentiality agreements with its
key  employees and clients, thereby seeking to limit distribution of proprietary
information.  There  can  be no assurance that the steps taken by the Company in
this  regard  will  be  adequate  to  deter  misappropriation  of  proprietary
information  or  that the Company will be able to detect unauthorized use of and
take  appropriate  steps  to  enforce its intellectual property rights. Software
developed  and other materials prepared by the Company in connection with client
engagements  are  usually  assigned  to  the  Company's  clients  following  the
termination  of the engagement. The Company retains the right to use the general
know-how  developed  by  the  Company  in the course of the engagement, and this
accumulated  knowledge  is  the  basis  for  the DA Foundation. The Company also
retains  all  rights  to  certain  of its proprietary methodologies and software
(such as DA PASSPORT and computer-based training software), the benefit of which
the  Company  provides  to  the  client  by  royalty-free  license.

     Dynamic  IQ(R),  DA  Foundation(R),  DA  Team  Teach(R)  and  DA Consulting
Group(R)  are  registered  trademarks  and/or service marks of the Company.  The
Company  also  claims  common law trademark rights in DACG and design, the globe
and  temple  logo,  Fast  Implementation  Toolkit(TM),  Fast  Implementation
Toolset(TM),  DA  Cornerstone(TM),  and  DA  Passport(TM), for each of which the
Company  has  filed  an application for registration in the United States Patent
and  Trademark  Office.  Furthermore,  the  Company  claims common law trademark
rights  in  DACG(TM),  DA  FIT/Fast  Implementation  Toolkit(TM), FastED(TM), DA
ASK(TM),  DA  Quickweb(TM),  DA Learning Centre, DA Learning Center, DA Reporter
and  the  slogan mark "Solutions for People and Technology"(TM), but as to these
has decided at present not to file applications for trademark registration.  The
Company  holds  no  patents.  The  Company  has  registered the copyright in the
computer  programs  titled  "DA Basic Skills Training for SAP R/3" and "DA Basic
Skills  Training for SAP R/3 v2.0 US."  The Company also claims the copyright in
numerous other works and may elect to register such copyrights on a case-by-case
basis.

RISK  FACTORS

History  of  losses

     The  Company  has  incurred net losses totaling approximately $27.2 million
during  1999, 2000 and 2001.  The Company began a restructuring process in 2000,
which  was completed during  2001.  As a result of the restructuring the Company
has  returned  to  profitability,  although  the  United States has continued to
generate  losses.  There  can be no assurance that overall profits will continue
and the losses in the United States will not continue.  Thus, the Company may be
required  to  record  additional  charges  to decrease the carrying value of the
deferred  tax  asset.

Our business operations are dependent on SAP and the ERP software market.

     A  substantial  portion  of  our  revenue  is derived from the provision of
end-user support services in connection with ERP software implementations by our
clients.  These  relationships  and  authorizations  are  generally  subject  to
termination  on  short notice. In addition, these licensors could further modify
their  software  in order to make the implementation cycles for its new releases
shorter  and less complicated, thereby possibly reducing the need for customized
end-user  support,  or  they  could increase their provision of end-user support
services  for  their  software  applications.  Software  vendors  are  currently
customers  and  direct competitors.  They could also cease referring us to their
customers  as  a provider of end-user support services. Any one or more of these
circumstances  could have a material adverse effect on our business and revenue.

We may not be able to keep up with rapid technological changes.

     Our  future  success  will  depend  on  our  ability  to  gain expertise in
technological  advances,  such as the latest releases from ERP software vendors,
and to respond quickly to evolving industry trends and client needs. Our efforts
to  gain  technological  expertise and to develop new technologies require us to
incur  significant expense. There can be no assurance that we will be successful
in  adapting  to  these  advances in technology or in addressing changing client
needs  on  a  timely  basis.  In  addition,  there  can be no assurance that the
services  or  technologies  developed  by  others  will not significantly reduce
demand  for  our  services  or  render  our  services obsolete.  Any significant
reduction  in the demand for our services will have a material adverse effect on
our  results  of  operations.

Our  stock  price  has  been  volatile.

     Stock  prices  may  be  subject to wide swings, particularly on a quarterly
basis,  in  response  to  variations  in  operating  and  financial  results,
fluctuations  in  earnings,  competitive  pressures,  market  place  conditions,


                                  Page 11 of 51
<PAGE>
failure to meet revenue expectations and other similar factors.  It is difficult
to  forecast the timing of revenue because project cycles depend on factors such
as  the  size  and  scope  of  assignments, circumstances specific to particular
clients  or  industries,  the  number and nature of client projects commenced or
completed  during a period, and the utilization rates of our professional staff.
Were  we to fail to meet expectations of our anticipated revenue in a period, or
if  we  were  to  experience a negative change in our perceived long-term growth
prospects,  either  would  likely  have  an  adverse  effect on our stock price.

We  may  continue  to  experience  increased  competition  from competitors with
greater  resources  than  ours,  from  potential clients performing services "in
house"  and  from  suppliers  delivering  a complete package to their customers.

     The  information technology services industry is highly competitive.  It is
served  by  many  national, regional and local companies, including full service
agencies and specialized temporary service agencies.  It has limited barriers to
entry,  in  part  due to rapidly changing technologies.  Our primary competitors
come  from  a variety of market segments, including "Big Five" accounting firms,
large  systems  consulting and implementation firms and large general management
consulting  firms.  Many  of  these  competitors  have  significantly  greater
financial, technical and marketing resources and greater name recognition.  Such
advantages  may  enable  these  competitors  to attract more clients and provide
faster  service  at  less  cost.  In  addition,  our  potential  clients  have
increasingly decided to dedicate sufficient internal resources to performing the
services  that  we  provide  "in  house",  particularly  where  these  resources
represent  a  fixed  cost  to the client.  We are also increasingly finding that
software  licensors  are  implementing  their  own software packages, as well as
educating  their  customers' employees in how to use them.  Such competition may
impose  additional  pricing  pressures.  We expect that the level of competition
will  remain  high  in  the future.  Increased competition could have a material
adverse  effect  on  our  ability  to  profitably  operate  our  business.

We  may  not  be  able  to  attract  and retain qualified information technology
consultants.

     Our  continued success will depend in large part on our ability to attract,
retain  and motivate highly skilled employees, particularly project managers and
other senior technical personnel. The qualified project managers that we require
are  in  great  demand  and  are  likely  to  remain  a limited resource for the
foreseeable  future.  Many  of the companies with which we compete for qualified
professionals  have  substantially greater financial and other resources than we
do.  There  can  be  no  assurance that we will be able to recruit, develop, and
retain a sufficient number of highly skilled, motivated professionals to compete
successfully.  In addition, competition for qualified personnel may also lead to
increased  costs  for  such  personnel  which  we  may  not be able to offset by
increases  in  billing  rates.  The loss of a significant number of professional
personnel  is  likely  to have a material adverse effect on us, particularly our
ability  to  complete  existing  projects  or  secure  new  projects.

Failure  to  adequately  estimate  costs,  or  efficiently  manage fixed-bid and
not-to-exceed  projects  could  have  a  material  adverse  effect  on  our
profitability.

     Certain  of  our  projects are undertaken on a fixed bid basis, pursuant to
which  we charge our clients a flat rate for our services, or on a not-to-exceed
basis,  pursuant  to  which  we  limit  the  maximum fee that we will charge our
client.  For  the  year ended December 31, 2001, we realized the majority of our
revenue  from fixed-bid or not-to-exceed projects. Were we to fail to adequately
estimate  the  actual  cost  to  us of completing a project under the guaranteed
not-to-exceed  or fixed fee price set forth in certain of our contracts, or were
we  to  fail  to  efficiently  manage  these  projects  after  entering into the
not-to-exceed  or  fixed  fee contract, we could become exposed to unrecoverable
budget  overruns,  which  could  materially  adversely affect our profitability.
Additionally,  client  engagements  are  generally  terminable with little or no
notice  or penalty, and our failure to meet a client's expectations could damage
our  relationship  with  that  client  and  cause  the  client  to terminate our
engagement.  A  client's  unanticipated  decision  to  terminate  or  postpone a
project  may  result in higher than expected numbers of unassigned professionals
or  severance  costs,  which  could  materially  adversely affect our results of
operations.


                                  Page 12 of 51
<PAGE>
We  do  not  have  any  patents to protect our intellectual property rights from
misappropriation.

     Our  success  in  the information technology services business depends upon
our  software  deployment  and  methodology  and  other proprietary intellectual
property  rights.  We do not hold any patents. We rely on a combination of trade
secret, nondisclosure and other contractual arrangements and technical measures,
and copyright and trademark laws to protect our proprietary rights. We generally
enter  into  confidentiality agreements with our employees, consultants, clients
and  potential  clients  and limit access to and distribution of our proprietary
information. There can be no assurance that the steps that we have taken will be
adequate to prevent misappropriation of our intellectual property rights or that
third parties will not independently develop functionally equivalent or superior
methodologies  or  software.  Moreover,  there  can  be  no assurance that third
parties  will not assert infringement claims against us in the future that would
result  in costly litigation or license arrangements regardless of the merits of
such  claims.  Additionally, because our engagements are typically work-for-hire
based,  we  assign  ownership  of,  or  grant a royalty-free license to use, the
materials  that  we  develop  specifically for our clients to those clients upon
project  completion.

Significant  exposure  to  international  markets.

     We  currently  have  international  operations  in  Singapore,  Australia,
England,  France,  Germany  and  Canada.  As  of  December  31, 2001, 81% of our
revenue resulted from our international operations.  The successful operation of
such  geographically  dispersed  offices  requires  considerable  management and
financial  resources  and results in significant ongoing expense.  International
operations and the provision of services in foreign markets are subject to risks
involving  trade  barriers,  exchange  controls,  national  and  regional  labor
strikes,  civil  disturbances  and  war,  and  increases  in  duties, taxes, and
governmental  royalties,  multiple  and  possibly overlapping tax structures, as
well  as  changes  in  laws  and  policies governing operations of foreign-based
companies.  We  may  also  experience  difficulties  relating  to  the  global
administration of our business.  Any of such factors may have a material adverse
effect  on  the  Company.

ITEM  2.  PROPERTIES

     Recognizing  the global nature of the information technology market and the
importance  of being able to serve multi-national clients, the Company has built
a  substantial  international  presence  and provides services in North America,
Europe  and  Asia-Pacific.  The  Company has offices in the U.S., Canada, United
Kingdom,  France, Germany,  Australia and Singapore.  The Company's headquarters
is  at  5847  San Felipe, Suite 1100, Houston, Texas. This lease expires in July
2004.  The  Company  also  maintains  foreign offices in Toronto, London, Paris,
Melbourne,  Sydney,  Singapore,  and  Canberra.  The  Company  has operations in
Dallas,  Chicago,  Philadelphia,  Boston  and  New York, but does not maintain a
physical  office. Each operation is located near one or more significant clients
of  the Company, and the physical facilities have terms that will expire between
one  and  five  years (exclusive of renewal options exercisable by the Company).
All  of  the  Company's  operations  are electronically linked together and have
access to all of the Company's capabilities and core consulting tools. From time
to  time,  the  Company uses office space provided at client sites to facilitate
performance  of  its  services  and  maximize  client contact. Where the Company
operates  in  areas  without  an established office, operations are handled on a
mobile  basis  with  corporate  support being delivered from one of its regional
centers  in  Houston,  London  or  Sydney.  The  Company  believes  its  current
facilities  are  adequate  for  its  needs.  The  Company  is  in the process of
subleasing  several  branch  facilities  that  were  vacated as a result of cost
reduction  measures  and  may  further  reduce  the  size of various facilities.

ITEM  3.  LEGAL  PROCEEDINGS

     From  time  to  time,  the  Company is a party to routine litigation in the
ordinary  course  of business. The Company does not believe that such litigation
will  have  a  material  impact  on  the  financial  statements.

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

     At the Company's Special Meeting of Shareholders held on December 11, 2001,
the  shareholders  of  the  Company  voted  on  the  following  matter:

     Approval  for  the  election of two Class C Directors, BK Prasad and Dennis
Fairchild.

     The  voting  results  were  as  follows:

                         Votes For     Votes Abstained
                         ---------     ---------------
                         6,566,685          18,100


                                  Page 13 of 51
<PAGE>
                                    PART II

ITEM  5.  MARKET  FOR  THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS

     The  Company's common stock has traded on the NASDAQ Stock Market under the
symbol  DACG.  The  following  table  sets  forth,  for  each  quarterly  period
indicated,  the high and low closing sale price for the common stock as reported
by  the  NASDAQ  National  Market.

              2000         High    Low
              -------------------------
              1st Quarter  $4.00  $2.50
              2nd Quarter   2.63   1.31
              3rd Quarter   2.75   1.50
              4th Quarter   1.94   0.69

              2001
              -------------------------
              1st Quarter  $1.63  $0.66
              2nd Quarter   1.80   1.25
              3rd Quarter   1.60   0.31
              4th Quarter   0.35   0.14

     No  dividends  were declared on the Company's common stock during the years
ended  December 31, 2000 and 2001, and the Company does not anticipate declaring
dividends  in  the  foreseeable  future.

     As  of  April  11, 2002 there were approximately 100 shareholders of record
and  greater  than  1,071  beneficial  shareholders.

     On  October  16,  2000,  the  Company consummated the sale to Purse Holding
Limited,  a British Virgin Islands limited company, of two million shares of the
Company's  common  stock  for  $4.8 million and warrants to purchase up to three
million  shares of the Company's common stock. The sale was effected pursuant to
a  Securities  Purchase Agreement, dated August 2, 2000, between the Company and
Purse.  The  Company credited its $2 million loan, received from Purse on August
3, 2000, toward the $4.8 million purchase price of the two million shares of its
common  stock.

     In  accordance  with  the  terms  of the Securities Purchase Agreement, the
Company  issued  (i)  two million shares of common stock at a price of $2.40 per
share  and  (ii)  warrants  to  purchase (a) two million shares of common stock,
exercisable  until October 16, 2003, at the greater of $3.00 per share or 85% of
the  market  price  per  share  of  the  Company's  common  stock at the time of
exercise, and (b) one million shares of common stock, exercisable for the period
of  time  after January 1, 2002, and until October 16, 2003, at $3.00 per share.

     The  sale of the securities was exempt from registration under Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act") and Rule 506 of
Regulation  D promulgated under the Securities Act, since the sale was made to a
single accredited investor who was acquiring the shares for investment without a
view  to  further  distribution. No underwriters were involved with the issuance
and  sale  of  the  securities.


                                  Page 14 of 51
<PAGE>
ITEM  6.   SELECTED  FINANCIAL  DATA

     The following selected consolidated financial statement data as of December
31,  2000  and 2001 and for each of the three years in the period ended December
31,  2001  is  derived  from the audited consolidated financial statements of DA
Consulting  Group,  Inc. and its subsidiaries (the "Company") included elsewhere
herein.  This  information  should be read in conjunction with such Consolidated
Financial  Statements  and  related  notes  thereto.  The  selected  financial
information  as  of  December  31, 1997, 1998 and 1999 has been derived from the
audited  financial  statements of the Company that have been previously included
in the Company's reports under The Securities Exchange Act of 1934, that are not
included  herein.  See  "Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations."

<TABLE>
<CAPTION>
                                                    YEARS ENDED DECEMBER 31,
                                          -------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE            1997     1998      1999       2000       2001
AMOUNTS)                                  --------  -------  ---------  ---------  --------
<S>                                       <C>       <C>      <C>        <C>        <C>
INCOME STATEMENT DATA:

  Revenue. . . . . . . . . . . . . . . .  $44,204   $80,132  $ 70,295   $ 30,989   $28,654
  Cost of revenue. . . . . . . . . . . .   24,063    40,817    38,717     20,656    16,536
                                          --------  -------  ---------  ---------  --------

  Gross profit . . . . . . . . . . . . .   20,141    39,315    31,578     10,333    12,118
  Selling and marketing expense. . . . .    3,726     5,195     7,403      4,945     3,280
  Development expense. . . . . . . . . .    1,223     2,124     1,802      3,667       702
  General and administrative expense . .   12,436    24,877    33,461     16,884    10,411
  Amortization expense . . . . . . . . .       54        29       354        760       592
  Restructuring charge . . . . . . . . .        -         -         -      4,666         -
  Employee stock-related charge. . . . .      263         -       142          -         -
                                          --------  -------  ---------  ---------  --------

  Operating income (loss). . . . . . . .    2,439     7,090   (11,584)   (20,589)   (2,867)
                                          --------  -------  ---------  ---------  --------

    Other (expense) income, net. . . . .     (135)       22       287         25      (326)
                                          --------  -------  ---------  ---------  --------

  Income (loss)  before taxes. . . . . .    2,304     7,112   (11,297)   (20,564)   (3,193)
  Provision (benefit)  for income taxes.      896     2,813    (3,034)    (7,347)    2,507
                                          --------  -------  ---------  ---------  --------

  Net income (loss). . . . . . . . . . .  $ 1,408   $ 4,299  $ (8,263)  $(13,217)  $(5,700)
                                          ========  =======  =========  =========  ========

  Basic earnings (loss)  per share (1) .  $  0.29   $  0.72  $  (1.28)  $  (1.93)  $ (0.68)
  Weighted average shares outstanding. .    4,808     5,976     6,444      6,841     8,419

  Diluted earnings (loss) per share (1).  $  0.28   $  0.69  $  (1.28)  $  (1.93)  $ (0.68)
  Weighted average shares outstanding. .    5,053     6,233    6 ,444      6,841     8,419

BALANCE SHEET DATA:
  Cash and cash equivalents. . . . . . .  $ 3,664   $ 9,971  $  5,795   $    949   $   373
  Working capital. . . . . . . . . . . .    4,101    25,585    11,007     (1,120)     (663)
  Total assets . . . . . . . . . . . . .   20,135    48,903    32,918     24,940    17,212
  Total debt . . . . . . . . . . . . . .    3,970         -         -        154     1,077
  Shareholders' equity . . . . . . . . .    7,943    34,944    25,238     16,291    10,303

<FN>
----------------
(1)  Basic  and  diluted  earnings per share for 1997 on a pro forma basis would
     have  been  $0.31  and  $0.29,  respectively, to give effect to the sale of
     Common Stock (at an initial public offering price of $14.50 per share, less
     underwriting  discounts and commissions and estimated offering expenses) to
     repay  indebtedness  and the associated reduction in interest expense as if
     such  repayment  had  occurred  on  January  1,  1997.
</TABLE>

ITEM  7.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
          RESULTS  OF  OPERATIONS

     This  Annual  Report  on Form 10-K contains certain statements that are not
historical  facts which constitute forward-looking statements within the meaning
of  the  Private Securities Legislation Reform Act of 1995 which provides a safe
harbor  for  forward-looking  statements.  These  forward-looking statements are
based  on  management's  belief  as  well as assumptions made by and information
currently  available  to  management,  and  are subject to substantial risks and
uncertainties  that  could  cause  the  Company's actual results, performance or
achievements  to  differ  materially  from  those  expressed or implied by these
forward-looking  statements.  When used in this report, the words "may," "will,"
"anticipate,"  "believe," "expect" and similar expressions as they relate to the
Company  or  its  management  are  intended  to  identify  such  forward-looking
statements.  Actual  future  results  and  trends  may  differ  materially  from
historical  results as a result of certain factors, including those set forth in
the  Risk Factors section of this report, in the Liquidity and Capital Resources
section  of  Management's  Discussion  and  Analysis  of Financial Condition and
Results of Operations section in this report and those risk factors set forth in
our  other  filings  with  the  Securities  and  Exchange  Commission.


                                  Page 15 of 51
<PAGE>
BUSINESS

     The  Company  is a leading international provider of employee education and
support  solutions  to  companies  investing in business information technology.
Through  its  272  employees worldwide at December 31,2001, the Company provides
employee  support solutions through customized change communications, education,
and  performance  support  services  to  clients.  Since  1988,  the Company has
provided  services  to  over  685  clients  most  of whom are Fortune Global 500
companies.

     The  Company  is  currently  organized  into  three divisions: the Americas
Division  which  includes  its  operations in North America; the Europe Division
which  includes  its  operations  in Europe; and the Asia Pacific Division which
includes  its  operations in Australia and Singapore. In 2001, the, Europe, Asia
Pacific  and  Americas  Divisions  represented  60%,  21%,  and  19% of revenue,
respectively.  The  number  of  clients  served  by  the  Company  has increased
substantially from 52 in 1994 to approximately 685 in 2001. The Company's client
base  is  diversified,  with  one  client  representing  18% of revenue in 2001.

     The  Company  derives  substantially  all  of  its  revenue  from  fees for
professional  services  related to supporting end-users in the implementation of
ERP  systems.  Revenue from clients implementing SAP software represented 87% of
billed  consulting  revenue  for  2001.  The  majority of the Company's projects
involve  from  three to ten consultants, are generally completed in three months
to  two  years, and result in revenue from $200,000 to $1.5 million. The Company
often  performs  multiple  projects  for  a  client  in  support  of  a  phased
implementation  of  the  business information technology. The Company's services
are  generally  provided pursuant to written contracts that can be terminated by
the  client  with  limited advance notice. In the event of such a termination by
the client, the client remains obligated to pay for the services rendered to the
client  to  the  termination  date.  The Company bills its clients weekly, twice
monthly  and monthly for the services provided by its consultants at agreed upon
rates,  and  where permitted, for expenses. The Company provides services to its
clients  primarily on a time and materials basis, although many of its contracts
contain  "not-to-exceed"  provisions  and  Company  performance obligations. The
remainder  of  the  Company's contracts are on a fixed-price basis, representing
approximately 28% of the Company's total revenue for 2001. Revenue from time and
materials  engagements,  as  well  as  revenue  from  fixed  price contracts, is
recognized  as  services  are  performed  and  the realization of the revenue is
assured.  The  Company  also  receives  approximately  3%  of total revenue from
license  fees  related  to  computer-based  training products and other software
products  that  are  developed independently or are co-developed by the Company.

     Cost  of  revenue  includes compensation and benefits paid to the Company's
professional  staff  and  all  direct  expenses  of performing project work. The
Company's  financial  performance  is highly dependent upon staff billing rates,
costs,  and  utilization  rates.  The  Company  manages  these  parameters  by
establishing and monitoring project budgets and timetables and tracking staffing
requirements  for  projects  in  progress  and  anticipated  projects.  Project
terminations,  completions,  and  scheduling  delays  may result in periods when
consultants  are  not  fully  utilized.  An  unanticipated  termination  of  a
significant  project  could  cause  the  Company  to  experience  lower  staff
utilization.  In  addition,  the  establishment  of new services or new regional
operations,  employee  vacations  and  training,  and increases in the hiring of
consultants  may  result  in  periods  of  lower  staff utilization and downward
pressure  on  gross  margins.  The  Company's  professional  staff are generally
employed  on  a  full-time basis, and therefore the Company incurs substantially
all  of  its  staff-related costs even during periods of low utilization. In the
past, the Company has experienced some seasonality in its business with somewhat
lower  levels  of  revenue  and profitability in Europe in the third quarter and
Asia  in the fourth quarter. The timing of project start-ups and completions, as
well  as  holidays and vacations has the most significant impact on fluctuations
in  revenue.

     Selling  and  marketing  expense  relates  principally  to compensation and
benefits  paid  to  the  Company's  dedicated  sales  staff and all direct costs
associated  with  the sales process. Development expense consists principally of
compensation  costs  for  the Company's in-house research and development. These
personnel  focus  on  development  of  methodologies  and  applications  of  new
technologies,  including  development  of computer-based training courseware and
performance  support  software  and  content.  Development expense also includes
personnel  who provide technical support for the Company's professional staff in
the  field.  Development  expense  in  2000  and early 2001 included the cost of
creating  a  web based learning management system named the Dynamic IQ.  General
and  administrative  expense  consists  principally of salaries and benefits for
management,  physical  facilities,  depreciation and professional fees.  General
and  administrative  salaries  include  executive  management,  accounting,
administrative,  information technology, human resources as well as compensation
for  the  senior  management  in  each  of  the  Company's  divisions.

NEW  ACCOUNTING  PRONOUNCEMENTS

     In  June  2001,  the  Financial  Accounting  Standard  Board finalized FASB
Statement  No.  141,  Business Combinations (SFAS 141), and No. 142 Goodwill and
Other  Intangible Assets (SFAS 142).   SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting  for  business  combinations initiated after June 30, 2001.  SFAS 141
also  requires us to recognize acquired intangible assets apart from goodwill if
the  acquired  intangible asset meets certain criteria.  SFAS 141 applies to all
business  combinations  initiated  after June 30, 2001 and for purchase business


                                  Page 16 of 51
<PAGE>
combinations  completed  on  or  after  July  1,  2001.  It  also requires, upon
adoption  of  SFAS  142,  that  we reclassify the carrying amounts of intangible
assets  and  goodwill  based  upon  the  criteria  of  SFAS  141.

     SFAS 142 requires, among other things, that we no longer amortize goodwill,
but  instead  test goodwill for impairment as least annually.  In addition, SFAS
142  requires  us  to  identify  reporting  units  for the purposes of assessing
potential  future  impairments  of  goodwill, reassess the useful lives of other
existing  recognized  intangible  assets  and  cease  amortization of intangible
assets  with an indefinite useful life.  An intangible with an indefinite useful
life  should  be  tested  for impairment in accordance with the guidance in SFAS
142.  SFAS  142  is  required  to  be  applied  in  fiscal years beginning after
December 15, 2001 to all goodwill and other intangible assets recognized at that
date,  regardless  of  when  those  assets  were initially recognized.  SFAS 142
requires  us to complete a transitional goodwill impairment test six months from
the  date  of  adoption.  We  are  also required to reassess the useful lives of
other  intangible assets within the first interim quarter after adoption of SFAS
142.  Currently,  we  do  not expect that adoption of SFAS 141 and SFAS 142 will
have  a  material  impact  on  our financial position and results of operations.

     The  Company  has  approximately  $0.2  million of goodwill included in its
balance  sheet  at December 31, 2001. Goodwill amortization for the for the year
ended  December  31,  2001,  is  $19,000  before  the provisions of SFAS 142 are
applied.  Implementation  of  SFAS  142  by  the  Company  will  result  in  the
elimination  of  amortization  of  goodwill.

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations,  SFAS  No.  143, which amends SFAS No. 19, Financial Accounting and
Reporting  by  Oil  and Gas Producing Companies, is applicable to all companies.
SFAS No. 143, which is effective for fiscal years beginning after June 15, 2002,
addresses financial accounting and reporting for obligations associated with the
retirement  of  tangible  long-lived  assets and the associated asset retirement
costs.  It  applies  to  legal  obligations  associated  with  the retirement of
long-lived  assets  that  result from the acquisition, construction, development
and/or  the  normal  operation  of  a  long-lived  asset,  except  for  certain
obligations  of  lessees.  As  used  in  SFAS  No. 143, a legal obligation is an
obligation  that  a  party  is  required to settle as a result of an existing or
enacted  law,  statute,  ordinance,  or  written  or  oral  contract or by legal
construction  of a contract under the doctrine of promissory estoppel.  While we
are  not yet required to adopt SFAS No. 143, we do not believe the adoption will
have  a  material  effect  on  our financial condition or results of operations.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
of  Disposal of Long-lived Assets.  SFAS No. 144, which supercedes SFAS No. 121,
Accounting  for  the Impairment of Long-lived Assets for Long-lived Assets to be
Disposed  of and amends ARB No. 51, Consolidated Financial Statements, addresses
financial  accounting and reporting for the impairment or disposal of long-lived
assets.  SFAS No. 144 is effective for fiscal years beginning after December 15,
2001,  and  interim  financials  within  those fiscal years, with early adoption
encouraged.  The  provisions  of  SFAS  No.  144  are  generally  to  be applied
prospectively.  As  of  the  date  of  this  filing,  we are still assessing the
requirements  of  SFAS  No.  144 and have not determined the impact the adoption
will  have  on  our  financial  condition  or  results  of  operations.

RESULTS  OF  OPERATIONS

     The following table sets forth, for the periods indicated, income statement
data  expressed  as  a  percentage  of  revenue:

<TABLE>
<CAPTION>
                                         PERCENTAGE OF REVENUE
                                       -------------------------
                                        YEARS ENDED DECEMBER 31,
                                       -------------------------
                                        1999     2000     2001
                                       -------  -------  -------
<S>                                    <C>      <C>      <C>
Revenue . . . . . . . . . . . . . . .   100.0%   100.0%   100.0%
Cost of revenue . . . . . . . . . . .    55.1     66.7     57.7
                                       -------  -------  -------
Gross profit. . . . . . . . . . . . .    44.9     33.3     42.3
Selling and marketing expense . . . .    10.5     16.0     11.4
Development expense . . . . . . . . .     2.6     11.8      2.5
General and administrative expense. .    47.8     54.5     36.3
Amortization expense. . . . . . . . .     0.5      2.4      2.1
Restructuring charge. . . . . . . . .       -     15.0        -
                                       -------  -------  -------
Operating income (loss) . . . . . . .   (16.5)   (66.4)   (10.0)
Other (expense) income, net . . . . .     0.4      0.0     (1.1)
                                       -------  -------  -------
Income (loss) before taxes. . . . . .   (16.1)   (66.4)   (11.1)
Provision (benefit) for income taxes.    (4.3)   (23.7)     8.8
                                       -------  -------  -------
Net income (loss) . . . . . . . . . .  (11.8)%  (42.7)%  (19.9)%
                                       =======  =======  =======
</TABLE>


                                  Page 17 of 51
<PAGE>
YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

     Revenue.   Revenue  decreased  by $2.3 million, or 7.5%, from $31.0 million
in 2000 to $28.7 million in 2001. The decrease was substantially attributable to
a  decrease in demand for services that began during the latter part of 1999 and
continued  throughout  2001, as competition for fewer assignments grew primarily
in  America.  Revenue  from  the Americas Division decreased by 54.5% from $11.8
million  to $5.4 million; revenue from the EMEA Division increased by 37.4% from
$12.5  million  to  $17.1  million;  and  revenue from the Asia Pacific Division
decreased  by 8.4% from $6.7 million to $6.1 million. The Company ended the 2001
period with 272 total employees, down from 336 employees at the beginning of the
period.

     Gross  profit.   Gross  profit  increased  by  $1.8 million, or 17.3%, from
$10.3  million  in  2000  to  $12.1 million in 2001, and increased from 33.3% of
revenue  in  2000  to  42.3%  of  revenue  in  2001.  The  increase is primarily
attributable  to  increased  bill  rates and increased recovery of travel costs.

     Selling and marketing expense.   Selling and marketing expense decreased by
$1.6  million,  or 33.7%, from $4.9 million in 2000 to $3.3 million in 2001. The
decrease  is  the  result  of  refocusing marketing efforts on a regional basis.
Sales  and marketing staff total 23 persons at the end of 2001 compared to 25 at
the  end  of  2000.

     Development  expense.   Development  expense  decreased by $3.0 million, or
80.9%,  from  $3.7  million  in 2000 to $0.7 million in 2001.  Development costs
during  the  year ended December 31, 2000 were due to professional fees incurred
for  the  development  of the Company's web-enabled learning management system -
Dynamic  IQ(TM),  which  was  launched  during  the  fourth  quarter  of  2000.
Development personnel decreased from 18 at year end  2000 to 2 at year end 2001.

     General  and  administrative  expense.   General and administrative expense
decreased by $6.5 million, or 38.3%, from $16.9 million in 2000 to $10.4 million
in  2001.  The  decrease in expense is due primarily to a reduction in headcount
in  the  areas  of  finance,  information  systems,  administration  and  human
resources.  Administrative  personnel have been reduced from 59 at year end 2000
to  31  at  year  end  2001.  In  addition,  facilities  costs  were  reduced by
consolidating  locations  during  the  year.

     Restructuring  Charge.  During the year ended December 31, 2000 the Company
recorded  restructuring  charges  of  4.7  million for termination pay and lease
abandonment.  No  restructuring charge was recorded in 2001.  During 2001 a $0.8
million  charge  to  administrative  expense  was  recorded for additional lease
abandonment.   At  December  31,  2001,  the  Company  believes  that  the
remaining provision for lease abandonment is  adequate to cover the future costs
attributable  to  this  plan.  At  December 31, 2001 an accrual of approximately
$1.1  million remained accrued  for future lease payments related  to  abandoned
leases.  No  liability  remained  for termination pay.  Payments for termination
pay  charged  to  the  reserve  totaled  $0.3  million  and  payments  for lease
abandonment  totaled  $1.1  million  during  2001.

     Amortization  expense.   Amortization  expense  decreased  by  $168,000, or
22.1%,  from $760,000 in 2000 to $592,000 in 2001, and decreased as a percentage
of  revenue from 2.4% in 2000 to 2.1% in 2001. Amortization decreased due to the
writeoff  of  leasehold  improvements.  Amortization  is  largely  due  to  the
amortization of internal development costs associated with the SAP system placed
in service in July 1999.  These costs will be amortized over an 84-month period.

     Operating  loss.   Operating loss decreased by $17.7 million or 86.1%, from
a  loss  of  $20.6  million  in  2000  to  $2.9 million in 2001. Operating loss,
exclusive  of restructuring charges and other intangible asset amortization, was
$2.3  million  in  2001  as  compared  to  $15.2  million  in  2000.

     Other  income  (expense), net.   Other income (expense), net decreased from
income  of  $25,000  in  2000  to  expense  of $326,000 in 2001. Interest income
decreased  from  $31,000  in 2000 to interest expense of $54,000 in 2001.  Other
expense  in  2001  includes  the  loss  on  sale and abandonment of fixed assets
totaling $157,000 compared to $123,000 in 2000.  Other income in 2000 included a
$100,000  gain  on  the  sale  of  a  small  business.

      Provision  for income taxes.   The increase in the Company's effective tax
rate  benefit  from  35.7%  in  2000  to  an  expense  of 78.5% in 2001, relates
primarily  to  the  valuation  allowance recorded against deferred tax assets in
2001.  At  December  31,  2001, the Company's deferred tax asset recorded on its
balance sheet was approximately $6.6 million, consisting primarily of future tax
benefits  resulting  from net operating loss ("NOL") carryforwards.  The Company
established a $4.0 million valuation allowance against deferred tax assets.  The
Company's  ability  to  recognize  the  entire benefit requires that the Company
achieve  certain  future  earnings  levels  prior  to  the expiration of the NOL
carryforwards.  The Company expects to generate the future earnings necessary to
utilize  the NOL carryforwards through implementation of reasonable tax planning
strategies and projected future income.  The Company could be required to record


                                  Page 18 of 51
<PAGE>
an  additional valuation allowance for a portion or entire deferred tax asset if
the market conditions deteriorate and future earnings are below, or projected to
be  below,  current  estimates.

     At  December  31, 2001, the Company had NOL carryforwards of $31.3 million.
Of  that amount, $3.0 million expires in 2006 to 2008 and  $24.6 million expires
in  2019,  2020  and 2021.  The remaining $3.7 million have no expiration.   The
Company  would  need  to  earn  $18.8 million income before taxes to recover all
deferred  tax  assets.

     Net  loss.   Net loss was $5.7 million in 2001 compared to a loss of  $13.2
million  in  2000. The loss per share decreased from $1.93 to $0.68 due both the
decrease  in  the net loss and the increase in the number of shares outstanding.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

     Revenue.   Revenue decreased by $39.3 million, or 55.9%, from $70.3 million
in 1999 to $31.0 million in 2000. The decrease was substantially attributable to
a  decrease in demand for services that began during the latter part of 1999 and
continued throughout 2000, as a result of the downturn in the market for complex
computer  software  as  companies  focused on Year 2000 readiness and associated
pricing  pressures  as  competition for fewer assignments grew. Revenue from the
Americas  Division  decreased  by  71.6%  from  $41.5  million to $11.8 million;
revenue  from  the  EMEA Division decreased by 39.0% from $20.5 million to $12.5
million; and revenue from the Asia Pacific Division decreased by 19.3% from $8.3
million  to  $6.7  million.  The  Company  ended  the 2000 period with 336 total
employees,  down  from  535  employees  at  the  beginning  of  the  period.

     Gross  profit.   Gross  profit  decreased  by $21.3 million, or 67.4%, from
$31.6  million  in  1999  to  $10.3 million in 2000, and decreased from 44.9% of
revenue  in  1999  to  33.3%  of  revenue  in  2000.  The  decrease is primarily
attributable  to maintaining the consultant workforce at lower utilization rates
in  anticipation  of  future  demand  and  pricing  pressures  due  to increased
competition as demand slowed in the second half of 1999 and continued to slow in
2000.

     Selling and marketing expense.   Selling and marketing expense decreased by
$2.5  million,  or 33.8%, from $7.4 million in 1999 to $4.9 million in 2000. The
decrease  is  the  result  of cost  reduction  measures  implemented  during the
first  quarter  of  2000 and reduced  commissions expense related to the reduced
level  of  sales  in  2000  as  compared  to  the  same  period  of  1999.

     Development  expense.   Development  expense  increased by $1.9 million, or
105.6%,  from  $1.8  million  in  1999 to $3.7 million in 2000.  The increase in
costs  during  the  year  ended  December  31,  2000 is due to professional fees
incurred  for the  development  of the Company's web-enabled learning management
system  -  Dynamic IQ(TM), which was launched during the fourth quarter of 2000.
These  costs  were  offset  in  part by reduced headcount as a  result  of  cost
containment  plans  implemented  during  the latter half of 1999 and  the  first
quarter  of  2000.

     General  and  administrative  expense.   General and administrative expense
decreased  by  $16.7  million,  or  49.7%,  from  $33.6 million in 1999 to $16.9
million  in  2000.  The  decrease  in expense is due primarily to a reduction in
headcount in the areas of finance, information systems, administration and human
resources  as  a  result  of  the  cost containment plans implemented during the
latter half of 1999 and during 2000.  In addition, facilities costs were reduced
by  consolidating  locations  during  the  year.

     Restructuring  Charge.  During the three month period ended March 31, 2000,
the  Company  implemented a plan to address the dramatic decline in training and
documentation  activity  for  enterprise resource planning implementations.  The
plan  consisted  of  regional base consolidations and downsizing of billable and
non-billable  personnel.  Charges  included  the  costs  of involuntary employee
termination  benefits, write-down of certain property and equipment and reserves
for  leasehold abandonment.  The reduction in workforce consisted of 60 billable
consultants  and  44 non-billable administrative personnel. Substantially all of
the  employee  terminations were completed during the first quarter. The Company
recognized  approximately  $1.5  million  expense  attributable  to  involuntary
employee  termination  benefits during the first quarter, of which approximately
$1.2  million  has  been  paid at December 31, 2000. In addition the Company has
reserved  approximately  $0.9  million  related to the abandonment of leases and
approximately  $1.0  million related to the writedown of leasehold improvements,
furniture  and  equipment  held  by  its  Americas division in the first quarter
of  2000.   During  the  fourth  quarter  of  2000, due to weakening in the real
estate market, the Company recorded an additional $1.3 million reserve for lease
abandonment  resulting  in  a  total annual charge of $2.2 million.  Of the $2.2
million reserved for lease abandonment, approximately $0.8 Million has been paid
against the reserve.  At  December 31,  2000,  the  Company  believed  that  the
remaining provision  is  adequate to cover the future costs attributable to this
plan.  At  December  31,  2000  an  accrual  of  approximately  $0.3 million for
severance  pay  remained  related  to  severance  contracts  being  paid  over a
12-month period.  In addition, approximately  $1.4 million remained accrued  for
future  lease  payments  related  to  abandoned  leases.


                                  Page 19 of 51
<PAGE>
     Amortization  expense.   Amortization  expense  increased  by  $406,000, or
114.7%, from $354,000 in 1999 to $760,000 in 2000, and increased as a percentage
of  revenue  from  0.5%  in  1999  to  2.4%  in 2000. The increase is due to the
amortization of internal development costs associated with the SAP system placed
in service in July 1999.  These costs will be amortized over an 84-month period.

     Operating  loss.   Operating  loss increased by $9.0 million or 77.6%, from
$11.6  million  in  1999  to  a  loss  of $20.6 million in 2000. Operating loss,
exclusive  of restructuring charges and other intangible asset amortization, was
$15.2  million.  On the same basis the operating loss was $11.2 million in 1999.

     Other  income  (expense), net.   Other income (expense), net decreased from
income  of  $287,000  in  1999  to  income  of  $25,000 in 2000. Interest income
decreased  from  $366,000  in  1999  to  $105,000 in 2000, reflecting investment
income  from  the  investment  of  proceeds  from  the  Company's initial public
offering  completed in April, 1998 (the "Offering".)  Prior to completion of the
Offering,  the  Company  borrowed  against  a  line  of  credit.

     Provision  for  income taxes.   The increase in the Company's effective tax
benefit  rate  from 26.9% in 1999 to a benefit rate of  35.7% in 2000, primarily
relates  to losses in lower income tax jurisdictions and non-deductible expenses
during 1999.  At December 31, 2000, the Company's deferred tax asset recorded on
its balance sheet was approximately $9.4 million, consisting primarily of future
tax  benefits  resulting  from  net  operating  loss ("NOL") carryforwards.  The
Company's  ability  to  recognize  the  entire benefit requires that the Company
achieve  certain  future  earnings  levels  prior  to  the expiration of the NOL
carryforwards.  The Company expects to generate the future earnings necessary to
utilize  the  NOL  carryforwards  through  implementation  of the reasonable tax
planning  strategies  and  future  income  projections.  The  Company  could  be
required  to  record  a valuation allowance for a portion or entire deferred tax
asset  if  the  market  conditions deteriorate and future earnings are below, or
projected  to  be  below,  current  estimates.

     At  December  31, 2000, the Company had NOL carryforwards of $26.7 million.
Of  that amount, $1.0 million expires in 2007, $5.0 million expires in 2019, and
$14.5  million  in  2020.  The  remaining  $6.2  million  have  no  expiration.

     Net  loss.   Net loss was $13.2 million in 2000 compared to a loss of  $8.3
million  in  1999.

QUARTERLY  OPERATING  RESULTS

     The  Company's  quarterly  operating  results  are included in the notes to
consolidated  financial  statements.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Since  its  inception, the Company has historically financed its operations
with cash flow from operations, supplemented by the issuance of common stock and
short-term  borrowings  under  revolving  line  of  credit  arrangements.

     The  Company's  cash and cash equivalents were $0.4 million at December 31,
2001,  compared  to  $0.9  million  at December 31, 2000.  The Company's working
capital  deficit  was  $0.7  million  at  December  31, 2001 compared to working
capital  of  $1.1  million  at  December  31,  2000.

     The  Company's  operating activities required cash of $1.5 million for year
ended  December  31, 2001, compared to  $9.3 million used in operations in 2000.
The  decrease  in cash used in operations primarily resulted from reduced pretax
operating  losses  offset  by  a  decrease  in  deferred  income  taxes  due  to
establishing  a  valuation  allowance  against  previously  recorded  income tax
benefits.  Accounts  receivable  reductions  and  income  taxes  receivable
produced  less  cash  in 2001 than 2000 and payment of accounts payable required
more  cash  during  2001.

     Investing  activities  provided  cash  of  $0.2  million  in the year ended
December 31, 2001, compared to cash provided of $2.4 million for the same period
in 2000.  For the year ended December 31, 2001, $0.3 million was provided by the
sale  of  property  and  equipment  .  During  2000 the Company had net sales of
short-term  investments  of  $2.4 million.  Sales of property and equipment were
largely  offset  by  the  purchase  of  property  and  equipment  during  2000.

     Financing  activities provided $0.9 million for the year ended December 31,
2001  as  a  result of borrowing against a line of credit.  Financing activities
provided  cash of  $4.9 million for the year ended December 31, 2000 as a result
of  the  sale  to Purse Holding Limited  ("Purse"),  a  British  Virgin  Islands
limited  company, of two million shares  of  the Company's common stock for $4.8
million  and  warrants  to  purchase up to three million shares of the Company's
common stock.  In  addition, the Company borrowed $154,000 on a short-term  line
of  credit  during  the  period.


                                  Page 20 of 51
<PAGE>
     The  Company  has an agreement with a bank, which provides for financing of
eligible  U.S.  accounts  receivable  under  a purchase and sale agreement.  The
maximum  funds  available  under  this agreement is $5 million.  At December 31,
2001,  the  Company  had  sold  $0.2  million  of  receivables  pursuant to this
agreement.  The  Company  has  a  credit  facility from a bank  with  a  maximum
line  of  credit  of  approximately  $1.1  million,  based  on eligible  foreign
accounts  receivable.  At December 31, 2001, the Company had borrowed  all funds
available  against  this  line.

     The  Company believes its current cash balances, receivable-based financing
and  cash provided by future operations will be sufficient to meet the Company's
working  capital and cash needs through 2002. However, there can be no assurance
that such sources of funds will be sufficient to meet these future expenses. The
Company  may  seek additional financing through a public or private placement of
equity.  The  Company's  need  for  additional  financing  will  be  principally
dependent  on the degree of market demand for the Company's services.  There can
be  no  assurance  that  the  Company will be able to obtain any such additional
financing  on  acceptable  terms,  if  at  all.

     The  Company  capitalizes software development costs beginning when product
technological  feasibility  is  established  and  concluding when the product is
ready  for  general  release.  At  such  time,  software  development  costs are
amortized  on  the  straight-line  basis  over  a  maximum of three years or the
expected  life of the product, whichever is less. During the year 2000 and 2001,
all  development  costs  for the companies web based learning management system,
Dynamic  IQ  were  expensed.  During  1999,  the Company capitalized $184,000 of
software  development  costs  relating  to  computer-based  training  software
development  which  were  amortized  over  12  months. Research costs related to
software  development  are  expensed  as  incurred.

     In  1999  the  Company  capitalized  $3.3  million  of implementation costs
related  to the Company's primary information system. Such development costs are
amortized  over  a  seven  year  period.

     The  Company is subject to market risk related to fluctuations in the value
of  the U.S. dollar compared to certain foreign currencies. We have subsidiaries
which  operate  in  Canada,  the United Kingdom, France, Germany, Australia, and
Singapore.  We  attempt  to  maintain  a  balance between assets and liabilities
denominated  in foreign currencies. The Company does not currently hedge against
currency  fluctuations.

ITEM 7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The Company from time to time holds short-term investments which consist of
variable  rate  municipal  debt  instruments.  The  Company  uses  a sensitivity
analysis  technique  to  evaluate the hypothetical effect that changes in market
interest  rates  may  have  on  the fair value of the Company's investments.  At
December  31,  2001  the  Company  did  not  hold  any  short-term  investments.

     We  are  subject  to  market risk exposure related to interest rates on our
credit  facilities.  At  December  31,  2001  our  outstanding facility was $1.1
million.

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     The  consolidated financial statements of the Company are included in Pages
33  through  49.

ITEM  9.  CHANGES  IN  AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL  DISCLOSURE

     The  Company has had no disagreements with its accountants on accounting or
financial  disclosure  issues.  The disclosures called for related to changes in
accountants  have been previously reported by the Company in Form 8-K's filed by
the  Company with the Securities and Exchange Commission on February 4, 2002 and
February  12,  2002.

                                    PART III

ITEM 10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     The  names,  ages  and  present  positions  of  the directors and executive
officers  of  the  Company  as  well as other relevant information are set forth
below:


                                  Page 21 of 51
<PAGE>
                                                              Year  in  Which
                                                              ---------------
                                                               First  Became
                                                              ---------------
Name                      Age      Position  with  Company        Director
------------------------  ---  -----------------------------  ---------------
Virginia L. Pierpont      60   Chief Executive Officer and         1987
                               President

Malcolm G. Wright         45   Chief  Operating  Officer

Dennis C. Fairchild       52   Executive Vice President and        2001
                               Chief Financial Officer

Nigel W.E. Curlet         56   Director                            1996

Gunther E.A. Fritze       65   Director                            1996

B.K. Prasad               65   Chairman  of  the  Board            2000

James R. Wilkinson        45   Director                            2002

     Virginia  L. Pierpont, age 60, founded the Company as a sole proprietorship
in  1984,  incorporated  the  business  in  1987,  and opened its United Kingdom
operation  in  1988. Ms. Pierpont was the Chief Executive Officer of the Company
from 1984 to 1993 and served as Chairman of the Board from December 1996 through
August  1998  and  again from April 2000 to August 2001.  She is a member of the
Company's  Compensation Committee. Ms. Pierpont is a Class B Director whose term
expires  at  the  2003  Annual  Meeting.

     Malcolm  G.  Wright,  age  45,  joined  the  Company  in March 2000 as Vice
President  of  Europe  and,  in  February  2001, was promoted to Chief Operating
Officer.  Prior  to  joining  the  Company, Mr. Wright was with Equifax Plc from
November  1996  to  January  2000,  and  his  last position was as European & UK
Divisional  Director  of Commercial Information Services. He also spent 17 years
with  Dun  &  Bradstreet  and was Director of Multinational Development at Dun &
Bradstreet  Europe  from  December  1990  to  November  1996.

     Dennis  C. Fairchild, age 52, joined the Company in April 1999 as Executive
Vice  President and Chief Financial Officer and is primarily responsible for the
finance  and  administrative  functions  of  the  Company.  Prior to joining the
Company,  Mr. Fairchild provided consulting services from April 1998 to February
1999.  From  April 1997 to April 1998, Mr. Fairchild was Chief Financial Officer
at  National  Water  & Power. He served as Chief Financial Officer at AmeriQuest
Technologies  from January 1994 to April 1997 and at Southeast Frozen Foods from
March  1990  to January 1994. Mr. Fairchild received his B.A. from Mankato State
University.  Mr.  Fairchild is a Class C Director whose term expires at the 2004
Annual  Meeting.

     Nigel  W.E.  Curlet,  age 56, has served as a director since December 1996.
Since 1976, he has been employed in various capacities by Shell Chemical Company
and  is  currently  its  Manager-Demand Chain Center of Excellence. Mr. Curlet's
prior management roles at Shell were in its information technology, research and
development,  and  operations and strategic planning departments. He is a member
of  the Company's Audit, Compensation and Stock Option Committees. Mr. Curlet is
a  Class  A  director  whose  term  expires  at  the  2002  Annual  Meeting.

     Gunther  E.A. Fritze, age 65, has served as a director since December 1996.
Mr.  Fritze  is  retired.  From 1962 to 1999, Mr. Fritze was employed in various
capacities  by  Bank  of  Boston. Mr. Fritze's most recent position was Manager,
Finance  Companies.  Mr. Fritze is a member of the Company's Audit, Compensation
and Stock Option Committees. Mr. Fritze is a Class A Director whose term expires
at  the  2002  Annual  Meeting.

     B.K.  Prasad,  Ph.D.,  age 65, has served as a director since December 2000
and as Chairman of the Board since August 2001. Dr. Prasad, a corporate strategy
and  management  consultant,  was  employed  as a Director and Vice President by
Comcraft Canada Limited since 1987, and by Comcraft Asia (Pte) Ltd. from 1981 to
1987  until  retiring  in  2001. Prior to joining Comcraft, Dr. Prasad served in
various  senior  finance  and  management  positions  in  large  industrial
organizations.  Dr.  Prasad holds an LLB, MBA, FCMA, FCA and CPA. Dr. Prasad has
been  designated  by Purse Holding Limited ("Purse") to serve as a member of the
Board  of Directors pursuant to the Stock Purchase Agreement between the Company
and  Purse  under  which  Purse  has  the  right  to


                                  Page 22 of 51
<PAGE>
designate  one  director for so long as Purse owns at least 25% of the Company's
Common Stock that it purchased under the Stock Purchase Agreement. Dr. Prasad is
a  Class  C  Director  whose  term  expires  at  the  2004  Annual  Meeting.

     James  R.  Wilkinson,  age  45, is the founder of Capstone Funding Ltd., an
investment  company  started  in  1990,  and  of The Strategic CFO, a consulting
company  started  in  1998 where Mr. Wilkinson devotes the majority of his time.
Prior  to  establishing  these  two  entities,  Mr.  Wilkinson  served  in
executive-level  positions in real estate and accounting firms. Mr. Wilkinson is
a  CPA  and  a  graduate  of  Texas  A&M  University. Mr. Wilkinson is a Class B
Director  whose  term  expires  in  2003.

SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and  Exchange  Commission  ("SEC")  initial  reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers,  directors  and  greater than ten-percent shareholders are required by
SEC  regulation  to  furnish  the Company with copies of all Section 16(a) forms
they  file.

     To  the  Company's  knowledge, based solely on review of the copies of such
reports  furnished  to  the  Company  and  written representations that no other
reports  were  required,  during  the  fiscal  year ended December 31, 2001, all
Section  16(a)  filing  requirements  applicable  to  the  Company's  officers,
directors  and  greater  than  ten-percent  beneficial  owners  were  complied.

ITEM  11.    EXECUTIVE  COMPENSATION

CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS

     The  following  table  sets forth, with respect to services rendered during
fiscal  years  2001,  2000  and  1999,  the  total  compensation  earned by each
individual  who  served  as  the Company's Chief Executive Officer during fiscal
year  2001  and  the  most highly compensated executive officers, other than the
Chief  Executive  Officer,  who were serving as executive officers at the end of
fiscal  year  2001  and  whose  total  annual salary and bonus exceeded $100,000
during  2001:

<TABLE>
<CAPTION>
                                             SUMMARY  COMPENSATION  TABLE

                                                                                      LONG  TERM
                                                                                     COMPENSATION
                                                                                     ------------
                                              YEAR      ANNUAL COMPENSATION (1)         AWARDS
                                              ----      -----------------------         ------

                                                                                      SECURITIES
                                                                                      UNDERLYING          ALL OTHER
NAME AND PRINCIPAL POSITION                         SALARY($) (2)       BONUS($       OPTIONS (#)   COMPENSATION ($) (3)
---------------------------                         --------------  ---------------  -------------  --------------------
<S>                                           <C>   <C>             <C>              <C>            <C>
Virginia L. Pierpont (4)                      2001  $      112,500                         100,000
    President and Chief Executive Officer     2000  $      103,125              ---            ---                  ---
                                              1999  $          ---              ---          1,025                  ---

Dennis C. Fairchild (5)                       2001  $      220,000  $        92,000        270,000  $         18,275 (8)
    Executive Vice President - Finance and    2000  $      189,847  $        92,000         40,000  $            17,092
    Administration, Chief Financial Officer   1999  $      142,708  $        55,000         30,750  $            46,046

Malcolm G. Wright (6)                         2001  $      213,693  $        73,237        300,000  $         23,902 (9)
     Chief Operating Officer                  2000  $      147,764              ---         33,000  $            19,327
                                              1999             ---              ---            ---                  ---

John E. Mitchell (7)                          2001  $      286,702  $       186,409         50,000  $        13,793 (10)
     Former President and                     2000  $      311,742  $       175,500        468,000  $            16,849
     Chief Executive Officer                  1999             ---              ---            ---                  ---

<FN>
(1)  All  figures  converted  to  U.S.  dollars based  upon  the exchange rate at the end of the applicable fiscal year.

(2)  Salary  includes  amounts  deferred,  if  any,  pursuant  to  the  Company's  401(k)  plan.

(3)  Amounts  include compensation expense attributed to employee stock awards, employer 401(k) contributions and Company
perquisites.


                                  Page 23 of 51
<PAGE>
(4)  Ms.  Pierpont  receives $150,000 annually, beginning May 1, 2000, under her employment agreement for her service as
Chairman of the Board of Directors and later as President and Chief Executive Officer. Ms. Pierpont voluntarily deferred
$37,500  of  her  compensation  until  2002.

(5)  Mr. Fairchild was elected as an Executive Vice President and the Chief Financial Officer of the Company on April
14, 1999 at a base annual salary of $175,000.  His base salary increased to  $220,000  effective November 1, 2000.

(6)  Mr.  Wright joined the Company on March 21 , 2000 as Vice President of Europe at a base salary of  $169,750 and was
elected  as  the Company's  Chief  Operating  officer  effective  February 6, 2001  at  a  base  salary  of  $213,693.

(7)  Mr.  Mitchell  joined  the Company on October 4, 1999 as president of its Europe, Middle East, Africa division, was
elected  as  the  Company's  Chief Operating  officer  effective February 11, 2000 at a base salary of $270,000, and was
elected  as  the President and Chief Executive Officer of the Company effective April 4, 2000 at a base annual salary of
$292,500.  His  base salary  increased  to  $390,000 effective November 1, 2000.   Mr. Mitchell resigned his position as
President  and  Chief  Executive  Officer  effective  August  9,  2001.

(8)  Represents $14,400 in car allowance and $3,875 in employer 401(k) contributions.

(9)  Represents $14,246 in car allowance and $9,656 in employer 401(k) contributions.

(10) Represents $13,973 in car allowance.
</TABLE>

STOCK  OPTIONS  GRANTED  TO  CERTAIN  EXECUTIVE OFFICERS DURING LAST FISCAL YEAR

     Under  the  1997  Stock  Option  Plan, options to purchase Common Stock are
available  for  grant  to  directors,  officers  and  other key employees of the
Company.  The  following  table sets forth certain information regarding options
for  the  purchase  of  Common  Stock  that  were awarded to the named executive
officers  during  fiscal  year  2001.

<TABLE>
<CAPTION>
                                            OPTION GRANTS IN LAST FISCAL YEAR

                         Number of
                        Securities      Percent of Total                                    Potential Realizable Gain
                        Underlying     Options Granted to   Exercise or                     at Assumed  Annual Rates
                          Options         Employees in       Base Price     Expiration  of Stock Appreciation for Option
Name                  Granted (#) (1)   Last Fiscal Year     ($/Sh) (2)        Date                   Terms
--------------------  ---------------  -------------------  ------------  --------------      Compounded Annually
                                                                                          --------------------------
                                                                                             5% ($)        10% ($)
                                                                                          -------------  -----------
<S>                       <C>           <C>                 <C>           <C>             <C>            <C>
Virginia L. Pierpont      100,000 (3)              9%            0.30        12/11/2011        18,867       47,812

Dennis Fairchild . .      100,000 (3)              9%            0.30        12/11/2011        18,867       47,812
                          150,000 (4)             13%            0.30        12/11/2011        28,300       71,718
                           20,000 (5)              3%            0.75        03/07/2011         9,433       23,906

Malcolm G. Wright. .      100,000 (3)              9%            0.30        12/11/2011        18,867       47,812
                          150,000 (4)             13%            0.30        12/11/2011        28,300       71,718
                           50,000 (6)              4%            1.00        02/01/2011        31,445       79,687

John E. Mitchell . .       50,000 (7)              4%            0.75        03/07/2011        23,854       59,765

<FN>
(1)  Unless  otherwise, noted, all options vest in one-third installments on the
second,  third,  and  fourth  anniversaries  of  the  date  of  grant.

(2)  The exercise price equaled the fair market value of a share of Common Stock
on the date of grant as determined by the Board of Directors. The exercise price
is payable in cash or by delivery of shares of Common Stock having a fair market
value  equal  to  the  exercise  price  of  the  options  exercised.

(3)  The  options  vest  in  one-third installments beginning December 11, 2002.


                                  Page 24 of 51
<PAGE>
(4)  The  options  vested  on  issuance.

(5)  The  options  vest  in  one-third  installments:  one-third on issuance and
one-third  on  each  anniversary.

(6)  The  options  vest in one-third installments beginning on February 1, 2002.

(7)  The option was terminated three months after Mr. Mitchell resigned from the
Company.
</TABLE>

STOCK  OPTIONS EXERCISED BY NAMED EXECUTIVE OFFICERS DURING FISCAL YEAR 2001 AND
HELD  BY  NAMED  EXECUTIVE  OFFICERS  AT  DECEMBER  31,  2001

     No  options  granted  by  the Company were exercised by the named executive
officers  during  2001.  The  following  table  sets  forth  certain information
regarding  options  for the purchase of Common Stock that were held by the named
executive  officers.

<TABLE>
<CAPTION>
                                AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
                                        AND FISCAL YEAR-END OPTION VALUES

                                                Number of Securities Underlying  Value of Unexercised In-the-Money
                         Shares                  Unexercised Options at FY-End          Options at FY-End
                      Acquired on      Value     -----------------------------          -----------------
Name                  Exercise (#)  Realized($)               (#)                            ($) (1)
--------------------  ------------  -----------               ---                            -------
                                                  Exercisable    Unexercisable     Exercisable    Unexercisable
                                                 --------------  --------------  ---------------  -------------
<S>                   <C>           <C>           <C>            <C>             <C>              <C>
Virginia L. Pierpont .         ---          ---           1,025         100,000             ---            ---
Dennis C. Fairchild . .        ---          ---         227,417         166,667             ---            ---
Malcolm G. Wright . . .        ---          ---         197,667         135,333
John E. Mitchell . . .         ---          ---             ---             ---             ---            ---
<FN>

(1) Based on $0.25 per share, the closing price of the Common Stock, as reported
by  the  Nasdaq  National  Market,  on  December  31,  2001.
</TABLE>

COMPENSATION  OF  DIRECTORS

     The  Company  pays each non-employee director an annual retainer of $12,500
and  awards non-employee directors an option to purchase 33,333 shares of Common
Stock  pursuant  to the Company's 1997 Stock Option Plan.  The number of options
is  determined by dividing $10,000 by the fair market value of a share of Common
Stock  on the date of the Company's Annual Meeting.  The Company also reimburses
directors  for  travel  expenses  incurred on behalf of the Company. The Company
pays  directors  fees  on  a  quarterly basis.  Directors fees for the third and
fourth  quarters  of  fiscal  year  2001  were  paid  in  2002.

EMPLOYMENT  CONTRACTS  AND  TERMINATION  OF  EMPLOYMENT  AND  CHANGE-IN-CONTROL
ARRANGEMENTS

     The  Company  entered  into  an  employment  agreement  with  Ms. Pierpont,
effective  April  4,  2000.  Pursuant  to her employment agreement, Ms. Pierpont
received $150,000 per year and reimbursement for her expenses incurred on behalf
of  the Company, beginning May 1, 2000, to serve as the Chairman of the Board of
Directors.  Effective  August,  2001,  Ms.  Pierpont  resigned  her  position as
Chairman  of  the  Board  and became President and Chief Executive Officer at an
annual  salary of $150,000.  Ms. Pierpont's salary may be increased by the Board
upon  its  annual  review  at  the beginning of each calendar year. Ms. Pierpont
serves  at  the  Board's  discretion,  and,  if  terminated by the Board, she is
entitled  to  receive  her  salary  for  90  days  after  she receives notice of
termination.  If  Ms.  Pierpont  is  terminated  within  180 days of a change of
control of the Company, she is entitled to receive her salary for 180 days after
she receives notice of termination. Ms. Pierpont's employment agreement contains
a  non-compete  covenant that is in effect during the term of her employment and
for  18  months  following  her  termination.

     The  Company  entered  into  an employment agreement with Mr. Mitchell, the
Company's  former  President  and  Chief  Executive  Officer,  on April 4, 2000.
Pursuant  to  his  employment  agreement,  Mr. Mitchell received an initial base
salary of (British pounds) 195,000 per year which was subject to increases based
on  the  Board's  annual  review  at  the  beginning  of each calendar year. The
annualized  salary  of Mr. Mitchell for 2001 was $390,000. Mr. Mitchell received
customary benefits, including medical, dental, disability and life insurance and
other  employee  benefit  plans available to employees at his level. Further, he
was  eligible for an annual performance bonus, as determined by the Company. The
employment  agreement  defined  that  Mr.  Mitchell  could be terminated without
cause, upon 90 days written notice. If so terminated, he was entitled to receive


                                  Page 25 of 51
<PAGE>
his  salary  and  benefits  for 18 months after termination, including any bonus
paid  or  payable  for  the calendar year before his termination, and all of his
outstanding  stock  options  would  become  fully vested and exercisable. If Mr.
Mitchell  voluntarily  terminated  his  employment  agreement  on  30 days prior
written  notice  with  good  reason,  as  defined  in the agreement, then he was
entitled  to  receive his salary and benefits for 12 months, including any bonus
paid  or  payable  for  the previous calendar year, and all of his stock options
would  become  fully  vested  and  exercisable.  If  Mr. Mitchell terminated his
employment  agreement on one year's prior written notice, he would have received
his  salary  and  benefits  for  12  months  after the termination is effective,
including  any  bonus  paid  or  payable  for  the  calendar  year  before  the
termination.  Mr.  Mitchell's  employment  agreement  contained  a  non-compete
covenant  that was in effect during the term of his employment and for 18 months
after his termination, unless termination was by the Company without cause or by
Mr.  Mitchell  for  good  reason.

     The  Company  also  entered  into a separation agreement with Mr. Mitchell,
effective  April  4,  2000, the initial term of which was two years. The Company
could,  in its sole discretion, extend, terminate or modify the agreement within
60  days  from and after its expiration and, if it took no action within 60 days
after  expiration of the term, the agreement would be automatically extended for
an  additional  two  years. Also, the agreement would have remained in force for
two  years  after  any  change  in  control  of  the  Company, as defined in the
agreement.  Under  the  agreement,  if Mr. Mitchell was involuntarily terminated
within  two  years  after a change in control of the Company, he would have been
entitled  to (i) (British pounds) 195,000 as a lump sum in cash, (ii) a lump sum
in  cash  equal  to  the cost of his benefits for two years, (iii) out-placement
services  in  connection  with  finding  new  employment  and  (iv) the right to
immediately  exercise  all  outstanding  stock  options  granted  to  him by the
Company.  Mr.  Mitchell  resigned  his  position  effective  August  9,  2001.

     The  Company  entered  into  an  employment  agreement with Mr. Wright, the
Company's  Chief  Operating  Officer,  dated  February  6, 2001. Pursuant to his
employment  agreement, Mr. Wright was entitled to receive an initial base salary
of  (British  pounds) 150,000 per year or such other rate as is shown on his pay
slip, subject to annual review, and the Company matches his contributions to his
personal  pension  up to five percent of his total pay. The annualized salary of
Mr.  Wright  for  2001  is  $216,000.  Each  of  the  Company and Mr. Wright may
terminate  the  employment  contract  on six months prior notice in writing. Mr.
Wright's  employment agreement contains a non-compete covenant that is in effect
during  the term of his employment and for six months following his termination.

     Prior  to  his  appointment  as Chief Operating Officer of the Company, Mr.
Wright  entered  into a change in control separation agreement with the Company,
effective  September  30,  1999,  the  initial  term of which was two years. The
Company  may,  in its sole discretion, extend, terminate or modify the agreement
within  60  days from and after its expiration and, if it takes no action within
60  days  after  expiration of the term, the agreement is automatically extended
for  an additional two years. Also, the agreement remains in force for two years
after  any  change in control of the Company, as defined in the agreement. Under
the  agreement, if Mr. Wright is involuntarily terminated within two years after
a  change  in  control  of  the  Company, he is entitled to (i) (British pounds)
117,000  as a lump sum in cash, (ii) a lump sum in cash equal to the cost of his
benefits  for two years, (iii) out-placement services in connection with finding
new  employment and (iv) the right to immediately exercise all outstanding stock
options  granted  to  him  by  the  Company.

     The  Company entered into a change in control separation agreement with Mr.
Fairchild,  the Company's Chief Financial Officer, effective September 30, 1999,
the  initial  term  of  which  was  two  years.  The  Company  may,  in its sole
discretion,  extend,  terminate  or modify the agreement within 60 days from and
after  its expiration and, if it takes no action within 60 days after expiration
of  the  term,  the  agreement  is  automatically extended for an additional two
years.  Also,  the  agreement remains in force for two years after any change in
control of the Company, as defined in the agreement. Under the agreement, if Mr.
Fairchild is involuntarily terminated within two years after a change in control
of  the  Company,  he  is entitled to (i) $243,250 as a lump sum in cash, (ii) a
lump  sum  in  cash  equal  to  the  cost  of  his benefits for two years, (iii)
out-placement  services  in  connection with finding new employment and (iv) the
right  to  immediately  exercise all outstanding stock options granted to him by
the  Company.

COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION

     Ms.  Pierpont served as a member of the Company's Compensation Committee in
2001  and  also  served  as the Chairman of the Board of Directors until August,
2001,  and  as  President  and  Chief Executive Officer thereafter for which she
receives  a  salary  of  $150,000  annually  and  reimbursement for her expenses
incurred  on  behalf  of  the  Company.

ITEM 12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     The  following  table  sets  forth  information, as of March 25, 2002, with
respect  to the beneficial ownership of shares of Common Stock of the Company by
each  person who is known to the Company to be the beneficial owner of more than
five


                                  Page 26 of 51
<PAGE>
percent  of  the  outstanding  Common  Stock,  by  each  director or nominee for
director,  by  each  of  the  named executive officers, and by all directors and
executive  officers  as  a  group.

<TABLE>
<CAPTION>
                                                    Amount and Nature of    Percent of Voting
Name and Address of Beneficial Owner              Beneficial Ownership (1)        Power
------------------------------------------------  ------------------------  ------------------
<S>                                               <C>                       <C>
EXECUTIVE OFFICERS AND DIRECTORS (2)
Virginia L. Pierpont (3) . . . . . . . . . . . .                  619,868                 7.4%
Dennis C. Fairchild (4). . . . . . . . . . . . .                  236,417                 2.7%
Malcolm G. Wright (5). . . . . . . . . . . . . .                  198,167                 2.3%
Nigel W.E. Curlet (6). . . . . . . . . . . . . .                   64,871                 0.8%
Gunther E.A. Fritze (7). . . . . . . . . . . . .                   81,191                 1.0%
B.K. Prasad (8). . . . . . . . . . . . . . . . .                   33,333                 0.4%
James R. Wilkinson . . . . . . . . . . . . . . .                      ---                 ---
John E. Mitchell (9) . . . . . . . . . . . . . .                   28,700                 0.3%
OTHER SHAREHOLDERS
Worcester Discretionary Trust  (10). . . . . . .                  631,092                 7.5%
Woodbourne Discretionary Trust  (10) . . . . . .                  629,034                 7.5%
Dimensional Fund Advisors, Inc. (11) . . . . .                    480,000                 5.7%
John Andrew Cowan (12) . . . . . . . . . . . . .                1,260,126                15.0%
Roger Geoffrey Barrs (12). . . . . . . . . . . .                1,260,126                15.0%
Purse Holding Limited (13) . . . . . . . . . . .                5,000,000                43.8%
All directors and executive officers as a group                 1,233,847                13.7%
    (8 persons) . . . . . . . . . . . . . . . .

<FN>
*  Less  than  1%

(1)  Each beneficial owner's percentage ownership is determined by assuming that
options  that  are  held by such person (but not those held by any other person)
and  that  are exercisable within 60 days of March 25, 2002 have been exercised.
Options  that  are  not  exercisable  within 60 days of March 25, 2002 have been
excluded.  Unless  otherwise, noted, the Company believes that all persons named
in  the  above  table  have sole voting and investment power with respect to all
shares  of  Common  Stock  beneficially  owned  by  them.

(2)  Unless  indicated otherwise, the address of each of these people is: c/o DA
Consulting  Group,  Inc.,  5847  San  Felipe, Suite 1100, Houston, Texas  77057.

(3)  Includes  (i)  370,000  shares  owned  by  Ms.  Pierpont's spouse, Nicholas
Marriner,  the  former  President and Chief Executive Officer of the Company and
Chairman  of  the  Board of Directors, (ii) 8,400 shares held by Ms. Pierpont as
custodian  for  three  minors,  and (iii) 1,025 shares that may be acquired upon
exercise  of  stock  options. Ms. Pierpont disclaims beneficial ownership of the
shares  owned  by  her  spouse  and  held  as  custodian  for  three  minors.

(4)  Includes  227,417  shares  that  may  be  acquired  upon  exercise of stock
options.

(5)  Includes  197,667  shares  that  may  be  acquired  upon  exercise of stock
options.

(6) Represents (i) 11,130 shares owned by Mr. Curlet's spouse, (ii) 1,450 shares
owned by Mr. Curlet's son, and (iii) 52,291 shares that may be acquired upon the
exercise  of  stock  options.

(7)  Includes 52,291 shares that may be acquired upon exercise of stock options.

(8)  Includes 33,333 shares that may be acquired upon exercise of stock options.

(9)  Mr.  Mitchell  is  a  former  Director  and  executive  officer.

(10)  Messrs.  John Andrew Cowan and Roger Geoffrey Barrs are the co-trustees of
the trust. The trustees have the power to appoint all or any part of the capital
and  income  of  the  trust to one or more of the beneficiaries described in the
trust  deed  and in such names and proportions and at such time as such trustees
shall in their discretion determine. The address of this stockholder is: Victory
House,  7th  Floor,  Prospect Hill, Douglas, Isle of Man, British Isle, IM1 1EQ.


                                  Page 27 of 51
<PAGE>
(11)  Information with respect to the ownership of this stockholder was obtained
from  Schedule  13G  filed  February  2,  2001  with the Securities and Exchange
Commission.  The  address  of  this  stockholder is: 1299 Ocean Avenue, Eleventh
Floor,  Santa  Monica,  CA  90401.

(12)  Represents  (i) 631,092 shares held by such stockholder as a co-trustee of
the  Worcester  Discretionary  Trust  and  (ii)  629,034  shares  held  by  such
stockholder  as  co-trustee  of  the  Woodbourne  Discretionary  Trust.  Such
stockholder disclaims beneficial ownership of the shares held by the trusts. The
address  of  this  stockholder  is:  Victory  House,  7th  Floor, Prospect Hill,
Douglas,  Isle  of  Man,  British  Isle,  IM1  1EQ.

(13)  Includes  3,000,000  shares  that may be acquired by Purse Holding Limited
("Purse")  upon exercise of a warrant, exercisable until October 16, 2003. Purse
is  a  British  Virgin  Islands limited company. Chanderia Charitable Foundation
1982  No.  5  ("Foundation")  is  the  sole  shareholder of Purse. R&H Trust Co.
(Bermuda)  Limited  ("Trust") is the Trustee of Foundation. John David Boden and
Paul  Barrington  Hubbard  are  the joint owners of Trust. Mr. Boden is also the
President  and a Director of Trust. Mr. Hubbard is also the Vice-President and a
Director  of  Trust and the settlor of Foundation. Purse, Foundation, Trust, and
Messrs. Boden and Hubbard have the shared power to vote or to direct the vote of
or  to  dispose  or  direct  the  disposition  of  the  shares  of Common Stock.
Foundation,  Trust,  and Messrs. Boden and Hubbard disclaim beneficial ownership
of  the  5,000,000  shares  of  Common  Stock.  The  address  of  Purse  is:
Altstetterstrasse  126, P.O. Box 1705, CH-8048, Zurich, Switzerland. The address
of  Foundation,  Trust  and  Messrs.  Boden  and  Hubbard  is:  Corner House, 20
Parliament  Street,  Hamilton  HM 12, Bermuda. Information with respect to these
stockholders  was  obtained  from  Schedule  13D  filed  March 16, 2001 with the
Securities  and  Exchange  Commission.
</TABLE>

WARRANTS  TO  PURCHASE  COMMON  STOCK

     On  October  16,  2000,  the  Company consummated the sale to Purse Holding
Limited,  a  British  Virgin  Islands  limited company ("Purse"), of two million
shares  of  the Company's Common Stock for $4.8 million and warrants to purchase
up  to three million shares of the Company's Common Stock. The sale was effected
pursuant  to  a Securities Purchase Agreement, dated August 2, 2000, between the
Company  and  Purse.  In  accordance  with  the terms of the Securities Purchase
Agreement,  the Company issued (i) two million shares of Common Stock at a price
of  $2.40  per  share  and  (ii)  warrants to purchase (a) two million shares of
Common  Stock,  exercisable  until October 16, 2003, at the greater of $3.00 per
share  or 85% of the market price per share of the Company's Common Stock at the
time  of  exercise,  and (b) one million shares of Common Stock, exercisable for
the  period  of time after January 1, 2002, and until October 16, 2003, at $3.00
per  share.  As  of April 30, 2001, there were 8,418,604 shares of the Company's
Common  Stock  outstanding. Therefore, if Purse exercised the warrants, it would
own  44% of the outstanding shares of Common Stock, assuming there were no other
changes  in  the  number  of  shares  outstanding.

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     Not  Applicable

                                     PART IV

ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND  REPORTS ON FORM 8-K

     (a)  Documents filed as a part of this Report.

          1.   The following financial statements of the Company and the related
               reports of independent accountants are filed herewith:

<TABLE>
<CAPTION>
                                                                                            Page
                                                                                           ------
                                                                                           Number
                                                                                           ------
<S>                                                                                        <C>
Reports of Independent Certified Public Accountants
Consolidated Financial Statements:. . . . . . . . . . . . . . . . . . . . . . . . . . . .    33
  Balance Sheets at December 31, 2000 and 2001. . . . . . . . . . . . . . . . . . . . . .    34
  Statements of Operations for the years ended December 31, 1999, 2000, and 2001. . . . .    35
  Statements of Shareholders' Equity for the years ended December 31, 1999, 2000 and 2001    36
  Statements of Cash Flows for the years ended December 31, 1999, 2000 and 2001 . . . . .    37
  Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . .   38-49
</TABLE>


                                  Page 28 of 51
<PAGE>
          2.   Schedules for which provisions were made in accordance with
               applicable accounting regulations of the Securities and Exchange
               Commission are inapplicable and therefore have been omitted.

     (b)  Reports on Form 8-K.

     On  February  4,  2002,  the  Company  filed  a  Current Report on Form 8-K
regarding  the  termination of its former auditors,  PricewaterhouseCoopers LLP.

     On  February  12,  2002,  the  Company  filed  a Current Report on Form 8-K
regarding  the  engagement  of  BDO  Seidman, LLP as the Company's new auditors.

     (c)  Exhibits

<TABLE>
<CAPTION>
EXHIBIT NO.               DESCRIPTION
-----------               -----------
<S>          <C>
      3.1*   - Amended and Restated Articles of Incorporation of the Company (incorporated
                 by reference to the Company's Form S-1/A filed April 20, 1998).
      3.2*   - Bylaws of the Company, amended on August 6, 1999 (incorporated by reference
                 to the Company's Form 10-Q filed November 15, 1999).
      4.1*   - Specimen Stock Certificate (incorporated by reference to the Company's Form
                 S-1/A filed April 20, 1998).
     10.1*   - Amended and Restated 1997 Stock Option Plan (incorporated by reference to
                 the Company's Form 10-K filed March 30, 2000).+
     10.2*   - Employment Agreement between John Mitchell and the Company dated May
                 15, 2000 (incorporated by reference to the Company's Form 10-Q filed August
                 14, 2000).+
     10.3*   - Securities Purchase Agreement dated August 2, 2000 between the Company and
                 Purse Holding Limited (incorporated by reference to Annex I to the Company's
                 Definitive Proxy Statement filed September 11, 2000).
     10.4*   - Change in Control Agreement between Dennis C. Fairchild and the Company
                 dated September 30, 1999 (incorporated by reference to the Company's Form
                 10-Q filed November 13, 1999).+
     10.5*   - Change in Control Agreement between Malcolm Wright and the Company dated
                 April 10, 2000. (incorporated by reference to the Company's Form 10-K filed
                 April 2, 2001). +
     10.6*   - Conditions of Employment Agreement between Malcolm Wright and DA
                 Consulting Services Limited dated February 6, 2001. (incorporated by
                 reference to the Company's Form 10-K/A filed April 30, 2001). +
     10.7*   - Separation Agreement between the Company and John Mitchell dated May 15,
                 2000. (incorporated by reference to the Company's Form 10-K/A filed
                 April 30, 2001). +
     10.8*   - Employment Agreement between the Company and Virginia L. Pierpont dated
                 October 12, 2000. (incorporated by reference to the Company's Form 10-K/A
                 filed April 30, 2001). +
     21.1    - Subsidiaries of the Company. (incorporated by reference to the Company's Form
                 10-K/A filed April 30, 2001).
     23.1    - Consent of BDO Seidman, LLP.
     23.2    - Consent of PricewaterhouseCoopers LLP.

<FN>
+  Management  contract  or  compensatory  benefit  plan  or  arrangement.
*  Incorporated  by  reference.
</TABLE>


                                  Page 29 of 51
<PAGE>
                                   SIGNATURES

     Pursuant  to  the requirements of Section 13 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  April  15,  2002.

                                        DA  Consulting  Group,  Inc.
                                                (Registrant)

                                   By:  /s/  Virginia  L.  Pierpont
                                        ----------------------------------------
                                        Virginia  L.  Pierpont
                                        President  and  Chief  Executive Officer

                                   By:  /s/  Dennis  C.  Fairchild
                                        ----------------------------------------
                                        Dennis  C.  Fairchild
                                        Chief  Financial Officer, Executive Vice
                                        President,  Secretary  and  Treasurer

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  in  the  capacities  indicated  on  April  15,  2002.

<TABLE>
<CAPTION>
        SIGNATURE                                     TITLE
        ---------                                     -----
<S>                         <C>

/s/ VIRGINIA L. PIERPONT    Chief Executive Officer and President (Principal Executive
------------------------    Officer)
Virginia L. Pierpont

/s/ DENNIS C. FAIRCHILD     Chief Financial Officer, Executive Vice President, Secretary
------------------------    and Treasurer (Principal Financial and Accounting Officer)
Dennis C. Fairchild

/s/ NIGEL W.E. CURLET       Director
------------------------
Nigel W.E. Curlet

/s/ GUNTHER E. A. FRITZE    Director
------------------------
Gunther E. A. Fritze

/s/ B.K. PRASAD             Director and Chairman
------------------------
B.K. Prasad

/s/ JAMES R. WILKINSON      Director
------------------------
James R. Wilkinson
</TABLE>


                                  Page 30 of 51
<PAGE>
REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS

To the Board of Directors and Shareholders of
DA Consulting Group, Inc.:

     We  have  audited  the  accompanying  consolidated  balance  sheet  of  DA
Consulting  Group,  Inc.  as  of  December 31, 2001 and the related consolidated
statements  of  operations,  shareholders'  equity,  and cash flows for the year
then ended.   These financial statements are the responsibility of the Company's
management.  Our  responsibility  is to express an opinion on these consolidated
financial  statements  based  on  our  audit.

     We  conducted our audit in accordance with the auditing standards generally
accepted  in  the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by management, and evaluating the overall financial
statement  presentation.  We  believe that our audit provides a reasonable basis
for  our  opinion.

     In  our  opinion,  the  consolidated  statements  referred to above present
fairly,  in  all  material  respects,  the consolidated financial position of DA
Consulting Group, Inc. at December 31, 2001, and the results of their operations
and  their  cash  flows  for  the  year then ended in conformity with accounting
principles  generally  accepted  in  the  United  States  of  America.

/s/BDO  Seidman,  LLP

Houston,  Texas
March  22,  2002


                                  Page 31 of 51
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
DA Consulting Group, Inc.

     In our opinion, the accompanying consolidated balance sheet and the related
consolidated  statements of operations, changes in shareholders' equity and cash
flows  present  fairly,  in  all material respects, the financial position of DA
Consulting Group, Inc. and Subsidiaries at December 31, 2000, and the results of
their  operations  and  their cash flows for each of the two years in the period
ended  December  31,  2000,  in  conformity with accounting principles generally
accepted  in  the  United States of America.  These financial statements are the
responsibility  of the Company's management; our responsibility is to express an
opinion  on  these  financial  statements based on our audits.  We conducted our
audits  of  these  financial  statements  in  accordance with auditing standards
generally  accepted  in  the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements,  assessing  the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We  believe that our audits provide a reasonable basis for the opinion expressed
above.

PricewaterhouseCoopers  LLP

Houston,  Texas
March 19, 2001


                                  Page 32 of 51
<PAGE>
<TABLE>
<CAPTION>
                                           DA CONSULTING GROUP, INC.

                                         CONSOLIDATED BALANCE SHEETS

                                     (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                                                                          DECEMBER 31,
                                                                                     --------------------
                                                                                       2000       2001
                                                                                     ---------  ---------
<S>                                                                                  <C>        <C>
                             ASSETS
                             ------
Current Assets:
     Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . .  $    949   $    373
     Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . .     5,226      4,053
     Unbilled revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       206         38
     Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       708        629
     Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . . .       440        352
                                                                                     ---------  ---------
               Total current assets . . . . . . . . . . . . . . . . . . . . . . . .     7,529      5,445
     Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . .     8,130      5,394
     Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       254        177
     Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8,647      5,990
     Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .       380        206
                                                                                     ---------  ---------
               Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 24,940   $ 17,212
                                                                                     =========  =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities:
     Revolving line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    154   $  1,077
     Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,840      1,759
     Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     6,655      3,272
                                                                                     ---------  ---------
               Total current liabilities. . . . . . . . . . . . . . . . . . . . . .     8,649      6,108
                                                                                     ---------  ---------
Lease abandonment liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .         -        801
                                                                                     ---------  ---------
Commitments and contingencies (Notes 10 and 11)

Shareholders' equity:
     Preferred stock, $0.01 par value: 10,000,000 shares authorized . . . . . . . .         -          -
     Common stock, $0.01 par value: 40,000,000 shares authorized; 8,571,777 shares
     issued and 8,418,604 shares outstanding. . . . . . . . . . . . . . . . . . . .        85         85
     Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . .    34,039     34,039
     Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (15,082)   (20,782)
     Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . .    (1,229)    (1,517)
     Treasury stock, at cost: 153,173 shares. . . . . . . . . . . . . . . . . . . .    (1,522)    (1,522)
                                                                                     ---------  ---------
               Total shareholders' equity . . . . . . . . . . . . . . . . . . . . .    16,291     10,303
                                                                                     ---------  ---------
                    Total liabilities and shareholders' equity. . . . . . . . . . .  $ 24,940   $ 17,212
                                                                                     =========  =========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                  Page 33 of 51
<PAGE>
<TABLE>
<CAPTION>
                              DA CONSULTING GROUP, INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS

                      (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                        YEARS ENDED DECEMBER 31,
                                                      ------------------------------
                                                        1999       2000       2001
                                                      ---------  ---------  --------
<S>                                                   <C>        <C>        <C>
Revenue. . . . . . . . . . . . . . . . . . . . . . .  $ 70,295   $ 30,989   $28,654
Cost of revenue. . . . . . . . . . . . . . . . . . .    38,717     20,656    16,536
                                                      ---------  ---------  --------
     Gross profit. . . . . . . . . . . . . . . . . .    31,578     10,333    12,118
Selling and marketing expense. . . . . . . . . . . .     7,403      4,945     3,280
Development expense. . . . . . . . . . . . . . . . .     1,802      3,667       702
General and administrative expense . . . . . . . . .    33,603     16,884    10,411
Amortization expense . . . . . . . . . . . . . . . .       354        760       592
Restructuring charge . . . . . . . . . . . . . . . .         -      4,666         -
                                                      ---------  ---------  --------
     Operating loss. . . . . . . . . . . . . . . . .   (11,584)   (20,589)   (2,867)
                                                      ---------  ---------  --------
Interest income (expense), net . . . . . . . . . . .       366         31       (54)
Other expense, net . . . . . . . . . . . . . . . . .       (79)        (6)     (272)
                                                      ---------  ---------  --------
     Total other income (expense), net . . . . . . .       287         25      (326)
                                                      ---------  ---------  --------
        Loss before provision for income taxes . . .   (11,297)   (20,564)   (3,193)
                                                      ---------  ---------  --------
Provision for income taxes:
        Current benefit. . . . . . . . . . . . . . .      (960)         -         -
        Deferred provision (benefit) . . . . . . . .    (2,074)    (7,347)    2,507
                                                      ---------  ---------  --------
               Provision (benefit) for income taxes.    (3,034)    (7,347)    2,507
                                                      ---------  ---------  --------
               Net loss. . . . . . . . . . . . . . .  $ (8,263)  $(13,217)  $(5,700)
                                                      =========  =========  ========
Basic and diluted loss per share . . . . . . . . . .  $  (1.28)  $  (1.93)  $ (0.68)
Weighted average shares outstanding. . . . . . . . .     6,444      6,841     8,419
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                  Page 34 of 51
<PAGE>
<TABLE>
<CAPTION>
                                                 DA  CONSULTING  GROUP,  INC.

                                         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                          (IN THOUSANDS)


                                                     ADDITIONAL   RETAINED      ACCUMULATED
                                       COMMON STOCK   PAID-IN     EARNINGS         OTHER        TREASURY STOCK        TOTAL
                                       ------------             (ACCUMUATED     COMPREENSIVE   -----------------   SHAREHOLDERS'
                                       NUMBER  PAR    CAPITAL     DEFICIT)          LOSS       NUMBER     COST        EQUITY
---------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>     <C>   <C>        <C>            <C>             <C>      <C>       <C>

BALANCE AS OF DECEMBER 31, 1998 . . .   6,572  $ 65  $ 29,359   $      6,398   $        (762)      22   $  (116)  $       34,944

   Stock repurchases. . . . . . . . .     ---   ---       ---            ---             ---      200    (1,943)          (1,943)
   Exercise of employee stock options     ---   ---      (146)           ---             ---      (69)      537              391
   Employee stock compensation. . . .     ---   ---       142            ---             ---      ---       ---              142

   Net loss . . . . . . . . . . . . .     ---   ---       ---         (8,263)            ---      ---       ---           (8,263)
   Foreign currency translation
   Adjustment, net of taxes of  $22 .     ---   ---       ---            ---             (33)     ---       ---              (33)
---------------------------------------------------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 1999 . . .   6,572    65    29,355         (1,865)           (795)     153    (1,522)          25,238
   Issuance of common stock . . . . .   2,000    20     2,446            ---             ---      ---       ---            2,466
   Issuance of warrants . . . . . . .     ---   ---     2,238            ---             ---      ---       ---            2,238

   Net loss . . . . . . . . . . . . .     ---   ---       ---        (13,217)            ---      ---       ---          (13,217)
   Foreign currency translation
   Adjustment, net of taxes of $241 .     ---   ---       ---            ---            (434)     ---       ---             (434)
---------------------------------------------------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 2000 . . .   8,572    85    34,039        (15,082)         (1,229)     153    (1,522)          16,291

   Net loss . . . . . . . . . . . . .     ---   ---       ---         (5,700)            ---      ---       ---           (5,700)
   Foreign currency translation
   Adjustment, net of taxes of $176 .     ---   ---       ---            ---            (288)     ---       ---             (288)
---------------------------------------------------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 2001 . . .   8,572  $ 85  $ 34,039   $    (20,782)  $      (1,517)     153   $(1,522)  $       10,303
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                  Page 35 of 51
<PAGE>
<TABLE>
<CAPTION>
                                             DA CONSULTING GROUP, INC.

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (IN THOUSANDS)

                                                                                       YEARS ENDED DECEMBER 31,
                                                                                     -----------------------------
                                                                                       1999      2000       2001
                                                                                     --------  ---------  --------
<S>                                                                                  <C>       <C>        <C>
Cash flows from operating activities:
     Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(8,263)  $(13,217)  $(5,700)
                                                                                     --------  ---------  --------
     Adjustments to reconcile net loss to net cash provided by (used in)
     operating activities:
          Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .    2,560      3,010     2,306
          Provision for (recovery of) doubtful accounts . . . . . . . . . . . . . .      435        662      (274)
          Writedown of property and equipment, goodwill and reserve for leasehold
          abandonment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        -      3,195       155
          Stock option compensation expense . . . . . . . . . . . . . . . . . . . .      142
          Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .   (2,074)    (7,347)    2,507
          Loss on sale on property and equipment. . . . . . . . . . . . . . . . . .       80        237       157
          Changes in operating assets and liabilities:
               Accounts receivable and unbilled revenue . . . . . . . . . . . . . .    8,157      2,918     1,615
               Prepaid expenses and other current assets. . . . . . . . . . . . . .      170         16        88
               Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .      182       (254)       77
               Accounts payable and accrued liabilities . . . . . . . . . . . . . .   (4,289)    (1,367)   (2,383)
               Deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,233)      (112)        -
               Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . .   (2,261)     2,979         -
                                                                                     --------  ---------  --------
                    Total Adjustments . . . . . . . . . . . . . . . . . . . . . . .    1,869      3,937     4,248
                                                                                     --------  ---------  --------
                    Net cash used in operating activities . . . . . . . . . . . . .   (6,394)    (9,280)   (1,452)
                                                                                     --------  ---------  --------
Cash flows from investing activities:
     Proceeds from sale of property and equipment . . . . . . . . . . . . . . . . .       19        263       295
     Sale of short-term investments . . . . . . . . . . . . . . . . . . . . . . . .    7,721      2,389         -
     Purchases of short-term investments. . . . . . . . . . . . . . . . . . . . . .      (77)         -         -
     Purchases of property and equipment. . . . . . . . . . . . . . . . . . . . . .   (6,249)      (253)      (54)
                                                                                     --------  ---------  --------
                    Net cash provided by  investing activities. . . . . . . . . . .    1,414      2,399       241
                                                                                     --------  ---------  --------
Cash flows from financing activities:
     Net proceeds from revolving line of credit . . . . . . . . . . . . . . . . . .        -        154       923
     Issuance of stock and warrants . . . . . . . . . . . . . . . . . . . . . . . .        -      4,800         -
     Stock repurchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,943)         -         -
     Proceeds from stock option exercises . . . . . . . . . . . . . . . . . . . . .      391          -         -
     Offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        -        (96)        -
                                                                                     --------  ---------  --------
                    Net cash provided by (used in) financing activities . . . . . .   (1,552)     4,858       923
                                                                                     --------  ---------  --------
Effect of changes in foreign currency exchange rate on cash and cash equivalents. .      (33)      (434)     (288)
                                                                                     --------  ---------  --------
                    Decrease  in cash and cash equivalents. . . . . . . . . . . . .   (6,565)    (2,457)     (576)
Cash and cash equivalents at beginning of year. . . . . . . . . . . . . . . . . . .    9,971      3,406       949
                                                                                     --------  ---------  --------
Cash and cash equivalents at end of year. . . . . . . . . . . . . . . . . . . . . .  $ 3,406   $    949   $   373
                                                                                     ========  =========  ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                  Page 36 of 51
<PAGE>
                            DA CONSULTING GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Nature  of  Operations  &  Basis  of  Presentation

     DA Consulting Group, Inc. and its subsidiaries (the "Company") is a leading
international  provider  of employee education and end-user support solutions to
companies  which  are implementing enterprise resource planning software systems
and  other  business  information  technology.  The  consolidated  financial
statements  include  the  accounts  of  DA  Consulting  Group,  Inc.  and  all
majority-owned  subsidiaries.  Intercompany  balances and transactions have been
eliminated  in  consolidation.

Management  Estimates

     The  preparation  of  financial  statements  in  conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities  and disclosure of contingent assets and liabilities at
the  date  of  the  financial statements and the reported amounts of revenue and
expenses  during  the  reporting  period. Actual results could differ materially
from  those  estimates.

Cash  and  Cash  Equivalents

      The  Company  considers  all  highly  liquid investments purchased with an
original  maturity  of  three  months  or  less  to  be  cash  equivalents.

Property  and  Equipment

     Property  and  equipment  are  stated at cost. Expenditures for substantial
renewals  and  betterments  are  capitalized,  while repairs and maintenance are
charged  to  expense  as incurred. Assets are depreciated or amortized using the
straight-line  method  for  financial reporting purposes and accelerated methods
for  tax  purposes  over  their  estimated  useful lives.  Computer equipment is
depreciated over a useful life of three to five years.  Furniture is depreciated
over  a  seven year useful life. Leasehold improvements are depreciated over the
term  of  the  lease.  In  1999  the  Company  capitalized  $3.3  million  in
implementation  costs  related  to  the  Company's  primary  information system.
Purchased  software  and  internal  software  development  costs  related to the
Company's  primary  information  system  are amortized over a seven year period.
Gains  or losses from disposals of property and equipment are reflected in other
expense  and  in  2000  are  partially  included  in  the  restructuring charge.

Software  Development  Costs

     The  Company  capitalizes software development costs beginning when product
technological  feasibility  is  established  and  concluding when the product is
ready  for  general  release.  At  such  time,  software  development  costs are
amortized  on  a  straight-line  basis  over  the  lesser  of three years or the
expected life of the product. Research costs related to software development are
expensed as incurred.  During 1999, the Company capitalized $184,000 of software
development costs relating to computer-based training software development which
was  expensed over 12 months.   All software development costs for the Company's
web based learning management system, Dynamic IQ, were expensed during the years
2000  and  2001.

Income  Taxes

     The  Company  recognizes  deferred income taxes for the expected future tax
consequences  of  events  that have been included in the financial statements or
tax  returns.  Under  this method, deferred income taxes are determined based on
the  difference between the financial statement carrying amount and tax basis of
assets  and  liabilities using enacted tax rates in effect in the years in which
the  differences  are  expected  to  reverse.  A valuation allowance is provided
against deferred tax assets which management considers more likely than not will
fail  to  be  realized.


                                  Page 37 of 51
<PAGE>
Foreign  Currency  Translation  and  Other  Comprehensive  Loss

     For  the  Company's  foreign  subsidiaries,  the  local  currency  is  the
functional  currency.  For  countries  with  highly inflationary currencies, the
Company uses the U.S. dollar as the functional currency.  Assets and liabilities
are  translated at year-end exchange rates, and related revenue and expenses are
translated  at the average exchange rates in effect during the period. Resulting
translation  adjustments  are  recorded as a separate component in shareholders'
equity,  accumulated  other comprehensive loss, which is excluded from net loss.

     Other  comprehensive  loss  is added to the net loss to determine the total
comprehensive  loss  of  the  Company.  The components of comprehensive loss are
listed  below  (in  thousands):

<TABLE>
<CAPTION>
                             YEARS ENDED DECEMBER 31,
                          -----------------------------
                            1999      2000       2001
                          --------  ---------  --------
<S>                       <C>       <C>        <C>
Net loss . . . . . . . .  $(8,263)  $(13,217)  $(5,700)
Other comprehensive loss      (33)      (434)     (288)
                          --------  ---------  --------
Comprehensive loss . . .  $(8,296)  $(13,651)  $(5,988)
                          ========  =========  ========
</TABLE>

Risks  and  Uncertainties

     For  the years ended December 31, 1999, 2000 and 2001, the Company incurred
net  losses  of  $8.2,  $13.2  and $5.7 million, respectively.  During the above
periods,  the  Company  generated  net  operating  loss  carryforwards  for  tax
reporting purposes of approximately $31.4 million ($11.1 million deferred of tax
assets),  of  which  the  Company  has  recorded  a  valuation  allowance  of
approximately  $4  million,  based  upon  managements estimate of future taxable
income  in  the United States, against the deferred tax asset generated from the
net  operating  loss  carryforwards.

     During  the  second  quarter of 2000, the Company implemented a strategy to
restructure  the  global operations of the Company. Revenue in the United States
continued  to  decline  throughout  2001. Management completed the restructuring
during  the  third  quarter of 2001. The Company recorded a $4 million valuation
allowance  against  the  deferred  tax asset in the United States resulting from
management's  projections  of  future  taxable income in the United States based
upon  the  size of the business in the United States and realistic future growth
rates.  Management  is  confident  the  Company's  restructuring  plan  will  be
successful  in  the United States, and the Company will return to profitability.
The  plan  has  already  begun  to  show  positive  results.

     There  can  be  no  assurance  that  management's restructuring plan in the
United  States  will yield sufficient future taxable income necessary to utilize
the  net  operating  loss  carryforwards recorded as a deferred tax asset by the
Company.  The  ultimate  realization of the deferred tax asset is dependent upon
management's  ability  to grow the revenues of the Company in the United States,
adhere  to  the  cost  saving measures put in place during the restructuring and
generate sufficient future taxable income. Any future decline, in the demand for
the  Company's services or the Company's inability to return to profitability in
the  United  States  will  result  in the Company being required to increase the
valuation  allowance against the deferred tax asset which would adversely affect
the  Company's  financial  position  and  operating  results.

Concentration  of  Credit  Risk

     Financial  instruments  that  potentially  subject  the  Company  to
concentrations  of  credit  risk  consist principally of cash, cash equivalents,
trade  accounts  receivable,  accounts payable and the revolving line of credit.
The  Company  performs  ongoing  credit evaluations of its clients and generally
does not require collateral for services. Bad debts have not been significant in
relation  to the volume of revenue. The Company maintains cash deposits and cash
equivalents  from  time  to  time,  which  exceed Federally insured limits, with
several  major  financial  institutions.  Management  periodically  assesses the
financial  condition  of  the  financial institutions and investees and believes
that  any  possible  credit  risk  is  minimal.

Fair  Value  of  Financial  Instruments

     The  carrying  amounts  of  cash,  cash  equivalents,  accounts receivable,
accounts payable and the revolving line of credit approximate fair values due to
the  short-term  nature of these instruments. The estimated fair values of these
instruments  have  been  determined  by  the  Company  using  available  market
information.


                                  Page 38 of 51
<PAGE>
Allowance  for  Accounts  Receivable

     The  Company provides an allowance for accounts receivable that it believes
may  not  be  fully  collectible or realizable.  The balance of the allowance at
December  31,  2000  and  2001,  was  $498,000  and  $224,000,  respectively.

Intangible  Assets

     Prior  to  July  1995,  the  Company's  business  was operated through four
separate  companies  located  in  the  United  States, the United Kingdom, South
Africa  and  Australia (the "Predecessor Companies").  All of the Companies were
under common management.  As a result of a stock exchange transaction on July 1,
1995, the Predecessor Companies became wholly-owned subsidiaries of the Company.
In  the  exchange  transaction, the net assets of the three acquired Predecessor
Companies were recorded at fair market value.  As a result, the Company recorded
$485,000  of  goodwill,  which  is  being  amortized over 25 years.  Accumulated
amortization  of  goodwill  was  $105,000  and $124,000 at December 31, 2000 and
2001,  respectively.

     Management  reviews  long-lived assets and intangible assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an  asset  may not be recoverable.  Recoverability of assets to be held and used
is  measured  by  a  comparison of the carrying amount of an asset to future net
cash flows expected to be generated by the asset.  If such assets are considered
to  be  impaired,  the  impairment to be recognized is measured by the amount by
which  the  carrying amount exceeds the fair value of the assets which considers
the  discounted future net cash flows.  Assets to be disposed of are reported at
the lower of the carrying amount or the fair value less costs of disposal.  This
analysis  of the long-lived assets at December 31, 2001 resulted in the writeoff
of  $155,000  of  goodwill  net  of accumulated amortization related to a closed
operating  unit.  The  analysis  indicated  there  were  no other impairments of
these  assets'  carrying  values.

Revenue  Recognition

     The  majority of the Company's contracts with clients are based on time and
expenses  incurred  with the remainder of the revenue generated from fixed price
contracts.  Accordingly,  service  revenue  under  both  types  of  contracts is
recognized  as  services  are  performed  and  the realization of the revenue is
assured.  Contract  costs  include direct labor costs and reimbursable expenses,
and those indirect costs related to contract performance such as indirect labor.
Selling,  general  and  administrative costs are charged to expense as incurred.
Provisions  for estimated losses on uncompleted contracts are made in the period
in  which such losses are determined. Changes in job performance, job conditions
and  estimated profitability may result in revisions to costs and income and are
recognized in the period in which the revisions are determined. Unbilled revenue
represents  the  revenue  earned in excess of amounts billed and deferred income
represents  billings  in excess of revenue earned. Revenue includes reimbursable
expenses  directly  incurred  in  providing  services  to  clients.  Revenue
attributable to reimbursable expenses amounted to $4.9 million, $1.8 million and
$2.0 million for the years ended December 31, 1999, 2000 and 2001, respectively.
The Company recognizes product revenue upon shipment to the client if no further
services  are  required.

Significant  Clients

     During  the  year  2001,  one  client  accounted  for  approximately 18% of
consolidated  revenue.  During  the  years  2000  and 1999, no individual client
account  for  more  than  10%  of  consolidated  revenue.

Earnings  Per  Share

     Basic  earnings per share is based on the weighted average number of common
shares  outstanding.  Diluted  earnings  per  share  is  based  on  the weighted
average  number  of  common and potential dilutive common shares outstanding and
utilizes  the  average  market  price per share when applying the treasury stock
method  in  determining  potential  dilutive  shares.

Accounting  for  Stock  Options

     In  October 1995, the Financial Accounting Standards Board issued Statement
of  Financial  Accounting  Standards  No.  123,  Accounting  for  Stock-Based
Compensation  ("SFAS  No.  123"),  which  sets  forth  accounting and disclosure
requirements  for  stock  option  and  other stock-based compensation plans. The
statement  encourages,  but  does  not  require, companies to record stock-based
compensation  expense using a fair-value method, rather than the intrinsic-value
method  prescribed  by  Accounting  Principles


                                  Page 39 of 51
<PAGE>
Board  ("APB")  Opinion  No.  25.  The  Company  has adopted only the disclosure
requirements  of  SFAS No. 123 and has elected to continue to record stock-based
compensation  expense  using  the intrinsic-value approach prescribed by APB No.
25.  Accordingly,  the Company computes compensation cost as the amount by which
the  intrinsic  vale of the Company's common stock exceeds the exercise price on
the date of grant. The amount of compensation cost, if any, is charged to income
over  the  vesting  period.

New  Accounting  Pronouncements

     In  June  2001,  the  Financial  Accounting  Standard  Board finalized FASB
Statement  No.  141,  Business Combinations (SFAS 141), and No. 142 Goodwill and
Other  Intangible Assets (SFAS 142).   SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting  for  business  combinations initiated after June 30, 2001.  SFAS 141
also  requires us to recognize acquired intangible assets apart from goodwill if
the  acquired  intangible asset meets certain criteria.  SFAS 141 applies to all
business  combinations  initiated  after June 30, 2001 and for purchase business
combinations  completed  on  or  after  July  1,  2001.  It  also requires, upon
adoption  of  SFAS  142,  that  we reclassify the carrying amounts of intangible
assets  and  goodwill  based  upon  the  criteria  of  SFAS  141.

     SFAS 142 requires, among other things, that we no longer amortize goodwill,
but  instead  test goodwill for impairment as least annually.  In addition, SFAS
142  requires  us  to  identify  reporting  units  for the purposes of assessing
potential  future  impairments  of  goodwill, reassess the useful lives of other
existing  recognized  intangible  assets  and  cease  amortization of intangible
assets  with an indefinite useful life.  An intangible with an indefinite useful
life  should  be  tested for impairment in accordance with the guidance  in SFAS
142.  SFAS  142  is  required  to  be  applied  in  fiscal years beginning after
December 15, 2001 to all goodwill and other intangible assets recognized at that
date,  regardless  of  when  those  assets  were initially recognized.  SFAS 142
requires  us to complete a transitional goodwill impairment test six months from
the  date  of  adoption.  We  are  also required to reassess the useful lives of
other  intangible assets within the first interim quarter after adoption of SFAS
142.  Currently,  we  do  not expect that adoption of SFAS 141 and SFAS 142 will
have  a  material  impact  on  our financial position and results of operations.

     The  Company  has  approximately  $0.2  million of goodwill included in its
balance  sheet  at December 31, 2001. Goodwill amortization for the for the year
ended  December  31,  2001,  is  $19,000  before  the provisions of SFAS 142 are
applied.  Implementation  of  SFAS  142  by  the  Company  will  result  in  the
elimination  of  amortization  of  goodwill.

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations,  SFAS  No.  143, which amends SFAS No. 19, Financial Accounting and
Reporting  by  Oil  and Gas Producing Companies, is applicable to all companies.
SFAS No. 143, which is effective for fiscal years beginning after June 15, 2002,
addresses financial accounting and reporting for obligations associated with the
retirement  of  tangible  long-lived  assets and the associated asset retirement
costs.  It  applies  to  legal  obligations  associated  with  the retirement of
long-lived  assets  that  result from the acquisition, construction, development
and/or  the  normal  operation  of  a  long-lived  asset,  except  for  certain
obligations  of  lessees.  As  used  in  SFAS  No. 143, a legal obligation is an
obligation  that  a  party  is  required to settle as a result of an existing or
enacted  law,  statute,  ordinance,  or  written  or  oral  contract or by legal
construction  of a contract under the doctrine of promissory estoppel.  While we
are  not yet required to adopt SFAS No. 143, we do not believe the adoption will
have  a  material  effect  on  our financial condition or results of operations.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
of  Disposal of Long-lived Assets.  SFAS No. 144, which supercedes SFAS No. 121,
Accounting  for  the Impairment of Long-lived Assets for Long-lived Assets to be
Disposed  of and amends ARB No. 51, Consolidated Financial Statements, addresses
financial  accounting and reporting for the impairment or disposal of long-lived
assets.  SFAS No. 144 is effective for fiscal years beginning after December 15,
2001,  and  interim  financials  within  those fiscal years, with early adoption
encouraged.  The  provisions  of  SFAS  No.  144  are  generally  to  be applied
prospectively.  As  of  the  date  of  this  filing,  we are still assessing the
requirements  of  SFAS  No.  144 and have not determined the impact the adoption
will  have  on  our  financial  condition  or  results  of  operations.

2.   MANAGEMENT'S  RESTRUCTURING  AND  LIQUIDITY

     During  the  second  quarter  of  2000, management began to restructure the
global  operations of the Company.  As part of the plan, management was required
to  downsize  the  Company  based  upon  current  and future projected operating
results.  Some  of  the  restructuring  initiatives  taken by management were as
follows:

     -  Reduction in the number of consultants
     -  Reduction of administrative personnel
     -  Reduction in office space
     -  Various other cost cutting measures


                                  Page 40 of 51
<PAGE>
     Management  completed  the  restructuring  of  the Company during the third
quarter  of  2001  and  achieved  overall profitability in the fourth quarter of
2001.  There  can  be  no  assurance  that  profitability  will  continue.

     The  Company  believes  its  current  cash  balances,  line  of  credit,
receivable-based  financing  and  cash  provided  by  future  operations will be
sufficient  to  meet  the  Company's  working capital and cash need for the next
fiscal  year.  However,  there  can  be  no  assurance that such sources will be
sufficient  to  meet  these future expenses and the Company's future needs.  The
Company  may  seek additional financing through a private or public placement of
equity.  The  Company's  need  for  additional  financing  will  be  principally
dependent  on the degree of market demand for the Company's services.  There can
be  no  assurance  that  the  Company will be able to obtain any such additional
financing  on  acceptable  terms,  if  at  all.

3.   PREPAID  EXPENSES  AND  OTHER  CURRENT  ASSETS

     The components of prepaid expenses and other current assets were as follows
(in  thousands):

<TABLE>
<CAPTION>
                                             DECEMBER 31,
                                             ------------
                                             2000   2001
                                             -----  -----
<S>                                          <C>    <C>
Prepaid rent. . . . . . . . . . . . . . . .  $  86  $ 185
Deposits. . . . . . . . . . . . . . . . . .     99     26
Other . . . . . . . . . . . . . . . . . . .    255    141
                                             -----  -----
  Prepaid expenses and other current assets  $ 440  $ 352
                                             =====  =====
</TABLE>

4.   PROPERTY AND EQUIPMENT, NET

     The  components  of  property and equipment were as follows (in thousands):

<TABLE>
<CAPTION>
                                                    DECEMBER 31,
                                                -------------------
                                                  2000       2001
                                                ---------  --------
<S>                                             <C>        <C>
Computer equipment . . . . . . . . . . . . . .  $  4,444   $ 4,342
Automobiles. . . . . . . . . . . . . . . . . .         9         -
Furniture and fixtures . . . . . . . . . . . .     1,590       900
Leasehold improvements . . . . . . . . . . . .       782       544
Software development and implementation costs.     4,187     4,177
Purchased software . . . . . . . . . . . . . .     3,186     3,164
                                                ---------  --------
  Property and equipment . . . . . . . . . . .    14,198    13,127

Less accumulated depreciation and amortization   ( 6,068)   (7,733)
                                                ---------  --------
  Property and equipment, net. . . . . . . . .  $  8,130   $ 5,394
                                                =========  ========
</TABLE>

5.   DEBT

Revolving  Line  of  Credit

     The  Company  has  a  credit facility from a foreign bank with an available
line  of  approximately  $1.1  million  (750,000  Great  Britain  Pounds),
collateralized  by and based on eligible foreign accounts receivable, secured by
a  mortgage deed against all the assets of the Europe Division and guaranteed by
the  Company.  At  December  31,  2001,  the  Company  had  used the entire line
available.  The  interest  rate  on this line of credit was 6.0% at December 31,
2001.  The  line  is  available through March 2003, however, may become due upon
demand.  At  March  22,  2002 the amount borrowed against the line of credit was
$400,000.


                                  Page 41 of 51
<PAGE>
Accounts  Receivable  Financing

     The  Company  has an agreement with a bank, which provides for financing of
eligible  U.S.  accounts  receivable  under  a purchase and sale agreement.  The
maximum funds available under the agreement is $5 million.  The agreement allows
for  the  bank  to  request  repurchase  of  an account receivable under certain
conditions.  The  bank  has never requested repurchase of an account receivable.
At  December  31, 2001, the Company had sold $0.2 million in accounts receivable
pursuant  to this agreement. At March 22, 2002 their were $13,000 in receivables
sold  under  the  agreement.

6.   ACCRUED  EXPENSES

     The  components  of  accrued  expenses  were  as  follows  (in  thousands):

<TABLE>
<CAPTION>
                                                 DECEMBER 31,
                                                --------------
                                                 2000    2001
                                                ------  ------
<S>                                             <C>     <C>
Compensation and related expenses. . . . . . .  $1,067  $  495
Bonuses. . . . . . . . . . . . . . . . . . . .     972     388
Professional fees. . . . . . . . . . . . . . .     856     427
Vacations. . . . . . . . . . . . . . . . . . .     544     442
Other taxes. . . . . . . . . . . . . . . . . .   1,518     634
Leasehold abandonment reserve, current portion   1,410     319
Other. . . . . . . . . . . . . . . . . . . . .     288     412
                                                ------  ------
  Accrued expenses . . . . . . . . . . . . . .  $6,655  $3,272
                                                ======  ======
</TABLE>

7.   INCOME  TAXES

     The  following  is a summary of the significant components of the Company's
deferred  income  taxes  (in  thousands):

<TABLE>
<CAPTION>
                                        DECEMBER 31,
                                      -----------------
                                       2000      2001
                                      -------  --------
<S>                                   <C>      <C>
Deferred tax assets:
     Net operating loss carryforward  $ 9,645  $11,100
     Accrued expenses. . . . . . . .    1,073      870
     Other . . . . . . . . . . . . .      171        -
     Valuation allowance . . . . . .        -   (4,000)
                                      -------  --------
          Deferred tax assets. . . .   10,889    7,970
                                      -------  --------
Deferred tax liabilities:
     Property and equipment. . . . .    1,534    1,351
                                      -------  --------
          Deferred tax liabilities .    1,534    1,351
                                      -------  --------
          Net, deferred tax assets .  $ 9,355  $ 6,619
                                      =======  ========
</TABLE>

     At  December  31,  2001,  for US Federal income tax reporting purposes, the
Company  had  $24.6  million  of  unused  net  operating  losses  available  for
carryforward  to  future  years.  The  benefit  from  carryforward  of  such net
operating  losses  will  expire  in  2019,  2020  and  2021.

     At  December  31,  2001,  the  Company  also had foreign net operating loss
carryforwards  totaling  $6.7  million  with  $3.0 million expiring in 2006. The
remaining  $3.7  million  have  no  expiration  date.

     The  benefit  from utilization of net operating loss carryforwards could be
subject  to  limitations  if significant ownership changes occur in the Company.
The  Company's  ability  to realize the entire benefit of its deferred tax asset
requires  that  the  Company achieve certain future earnings levels prior to the
expiration  of  its  NOL  carryforwards.  The  Company  recorded  a $4.0 million
valuation  allowance  against  deferred  tax  assets  during  2001.  The Company
believes  it  will  generate  sufficient taxable income to realize the remaining
$6.6  million  in deferred tax assets. The Company could be required to record a


                                  Page 42 of 51
<PAGE>
valuation  allowance  for  a  portion or all of its deferred tax asset if market
conditions  deteriorate and future earnings are below, or projected to be below,
its  current  estimates  and  management believes it is more likely than not the
deferred  tax  assets  will  fail  to  be  realized.

     The  components of the Company's provision for income taxes were as follows
(in  thousands):

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                 --------------------------
                                                   1999      2000     2001
                                                 --------  --------  ------
<S>                                              <C>       <C>       <C>
United States federal and state:
     Current (benefit). . . . . . . . . . . . .  $  (562)  $     -   $    -
     Deferred provision (benefit) . . . . . . .   (1,774)   (5,121)   2,334
                                                 --------  --------  ------
                                                  (2,336)   (5,121)   2,334
                                                 --------  --------  ------
Foreign:
     Current  (benefit) . . . . . . . . . . . .     (398)        -        -
     Deferred  provision (benefit). . . . . . .     (300)   (2,226)     173
                                                 --------  --------  ------
                                                    (698)   (2,226)     173
                                                 --------  --------  ------
          Provision (benefit) for income taxes.  $(3,034)  $(7,347)  $2,507
                                                 ========  ========  ======
</TABLE>

     The  difference  between the effective federal income tax rate reflected in
the  provision  (benefit)  for income taxes and the statutory federal income tax
rate  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                                        DECEMBER 31,
                                                 -------------------------
                                                  1999     2000     2001
                                                 -------  -------  -------
<S>                                              <C>      <C>      <C>
U.S. statutory rate . . . . . . . . . . . . . .   (34.0)  (34.0)%  (34.0)%
Write-off of investment in foreign subsidiaries    (2.3)        -      -
State and local . . . . . . . . . . . . . . . .    (3.1)    (2.7)    (4.3)
Foreign . . . . . . . . . . . . . . . . . . . .     8.5      0.5     (1.1)
Other . . . . . . . . . . . . . . . . . . . . .     4.0      0.5      1.3
Valuation allowance . . . . . . . . . . . . . .       -        -    116.6
                                                 -------  -------  -------
     Effective tax rate . . . . . . . . . . . .  (26.9)%  (35.7)%    78.5%
                                                 =======  =======  =======
</TABLE>

     The  U.S. components of income (loss) before taxes were $(3.9), $(13.7) and
$(3.4)  million in 1999, 2000 and 2001, respectively, and the foreign components
were  $(7.4),  $(6.9)  and  $0.2  million  in 1999, 2000 and 2001, respectively.

8.   STOCK-BASED  COMPENSATION  PLANS

Stock  Options

     The  Company's  1997  Stock  Option  Plan, as amended in December 1999 (the
"Option  Plan"),  is a stock-based incentive compensation plan. Under the Option
Plan,  the  Company  is  authorized  to  issue  1,960,000 shares of common stock
pursuant to "awards" granted in the form of incentive stock options (intended to
qualify  under Section 422 of the Internal Revenue Code of 1986, as amended) and
non-qualified  stock  options  not intended to qualify under Section 422. Awards
may  be  granted  to selected employees, directors, independent contractors, and
consultants  of  the  Company  or  any  subsidiary.  Stock  options granted have
contractual  terms  of  10  years. Unless otherwise specified in the terms of an
award,  all  options  vest on a schedule: 33% per year for 3 years, beginning on
the  second  anniversary  of the date of grant. Options granted under the Option
Plan  are  at  prices equal to the fair market value of the stock on the date of
the  grant, as determined by the Company's Board of Directors. To date, no stock
options  have  been  granted  to  independent contractors and consultants of the
Company.


                                  Page 43 of 51
<PAGE>
     The following table sets forth pertinent information regarding stock option
transactions  and  stock option prices during the years ended December 31, 1999,
2000  and  2001:

<TABLE>
<CAPTION>
                                                                           NUMBER OF     WEIGHTED
                                                                           SHARES OF      AVERAGE
                                                                           UNDERLYING    EXERCISE
                                                                             OPTIONS      PRICES
                                                                          ------------  ---------
<S>                                                                       <C>           <C>
Outstanding at December 31, 1998 . . . . . . . . . . . . . . . . . . . .      791,430   $   10.28
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      541,140        9.20
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (68,530)       5.71
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (222,980)      12.12
                                                                          ------------
Outstanding at December 31, 1999 . . . . . . . . . . . . . . . . . . . .    1,041,060        9.63
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,038,699        1.98
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            -           -
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (750,162)       9.48
                                                                          ------------
Outstanding at December 31, 2000 . . . . . . . . . . . . . . . . . . . .    1,329,597        3.61
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,172,749        0.38
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            -           -
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,010,496)       3.40
                                                                          ------------
Outstanding at December 31, 2001 . . . . . . . . . . . . . . . . . . . .    1,491,850        1.21
Exercisable at December 31, 1999 . . . . . . . . . . . . . . . . . . . .       94,593        6.14
Exercisable at December 31, 2000 . . . . . . . . . . . . . . . . . . . .      262,430        6.04
Exercisable at December 31, 2001 . . . . . . . . . . . . . . . . . . . .      618,957        1.64
                                                                          ============  =========
Weighted average exercise price of options granted during the year ended
    December 31, 2001. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    0.38
                                                                                        =========
</TABLE>

     The  fair  value  of  each stock option granted is estimated on the date of
grant  using  the  minimum value method of option pricing based on the following
weighted-average  assumptions:  dividend  yield  of 0%; risk-free interest rates
ranging  from  4.38%  to  6.77%; volatility of 90% and expected life of 5 years.

     The  following  table  sets  forth  pertinent  information  regarding  the
outstanding  stock  options  at  December  31,  2001:

<TABLE>
<CAPTION>
                        Options Outstanding                    Options Exercisable
               -----------------------------------------  ---------------------------
                                              Weighted-
Actual Range                Weighted Average   Average                    Weighted-
of Exercise      Number        Remaining       Exercise     Number         Average
Prices         Outstanding  Contractual Life    Price     Exercisable  Exercise Price
-------------  -----------  ----------------  ----------  -----------  --------------
<S>            <C>          <C>               <C>         <C>          <C>

$0.30 -  0.78    1,068,749               9.9  $      .32      413,332  $         0.32
 1.00 -  1.56      149,300               8.7        1.20       45,333            1.39
 1.69 -  3.25      148,166               8.5        2.10       64,833            2.23
 3.44 -  9.75      100,455               6.4        6.35       80,822            5.90
 9.88 - 15.25       25,180               6.4       13.11       14,637           13.59
-------------  -----------  ----------------  ----------  -----------  --------------
 0.30 - 15.25    1,491,850               7.6        1.21      618,957            1.64
</TABLE>

Pro  Forma  Net  Loss  and  Loss  Per  Share

     Had  the  compensation cost for the Company's stock-based compensation plan
been  determined  consistent with SFAS No. 123, the Company's net loss per share
at  December  31,  1999,  2000  and 2001 would approximate the pro forma amounts
below  (in  thousands  except  per  share  amounts):

<TABLE>
<CAPTION>
                               1999      2000       2001
                             --------  ---------  --------
<S>                          <C>       <C>        <C>
Net loss:
     As reported. . . . . .  $(8,263)  $(13,217)  $(5,700)
     Pro forma. . . . . . .   (9,501)   (14,997)   (9,393)

Diluted earnings per share:
     As reported. . . . . .  $ (1.28)  $  (1.93)  $ (0.68)
     Pro forma. . . . . . .    (1.47)     (2.19)    (1.12)
</TABLE>


                                  Page 44 of 51
<PAGE>
     The  effects  of applying SFAS No. 123 in this pro forma disclosure are not
indicative  of  future  amounts.

9.   SHAREHOLDERS'  EQUITY

Stock  Repurchase  Plan

     In  March  1999, the Company established a plan to repurchase up to 250,000
shares  of its outstanding common stock.  During the second quarter of 1999, the
Company  repurchased  200,000  shares  at an average of $9.70 per share totaling
$1.9  million.  The  Company suspended the plan at the end of the second quarter
of  1999.

Issuance  of  Common  Stock  and  Stock  Warrants

     On  October  16,  2000,  the  Company consummated the sale to Purse Holding
Limited  ("Purse"),  a  British  Virgin  Islands limited company, of two million
shares  of  the Company's common stock for $4.8 million and warrants to purchase
up to three million shares of the Company's common stock.  The sale was effected
pursuant  to  a  Securities Purchase Agreement ("the Agreement") dated August 2,
2000,  between  the  Company  and  Purse.  The  Agreement  was  approved  by the
Company's  shareholders  at  a  special  meeting  held on October 12, 2000.  The
Company  credited  its  $2  million loan, received from Purse on August 3, 2000,
toward  the  $4.8 million purchase price of the two million shares of its common
stock.

     In  accordance  with  the  terms  of  the Agreement, the Company issued two
million  shares of common stock at a price of $2.40 per share including warrants
to  purchase  (a)  two million shares of common stock, exercisable until October
16, 2003, at the greater of $3.00 per share or 85% of the market price per share
of  common  stock  at the time of exercise, and (b) one million shares of common
stock,  exercisable  for  the  period  of  time after January 1, 2002, and until
October  16,  2003,  at  $3.00  per  share.

Loss  Per  Share

     The  following table summarizes the Company's computation of loss per share
for  the  years ended December 31, 1999, 2000 and 2001 (in thousands, except per
share  amounts).  The calculation of diluted weighted average shares outstanding
excludes  1.0  million,  4.3  million  and 4.5 million common shares pursuant to
outstanding options and warrants for the year ended December 31, 1999, 2000, and
2001,  respectively,  because  their  effect  was
antidilutive.

<TABLE>
<CAPTION>
                                                                           YEARS ENDED DECEMBER 31,
                                                                          1999      2000       2001
                                                                        --------  ---------  --------
<S>                                                                     <C>       <C>        <C>
Basic loss per share . . . . . . . . . . . . . . . . . . . . . . . . .  $ (1.28)  $  (1.93)  $ (0.68)
                                                                        ========  =========  ========
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(8,263)  $(13,217)  $(5,700)
                                                                        ========  =========  ========
Weighted average shares outstanding. . . . . . . . . . . . . . . . . .    6,444      6,841     8,419
Computation of diluted loss per share:
     Common shares issuable under outstanding stock options. . . . . .        -          -         -
     Less shares assumed repurchased with proceeds from exercise stock
          Options. . . . . . . . . . . . . . . . . . . . . . . . . . .        -          -         -
                                                                        --------  ---------  --------
     Adjusted weighted average shares outstanding. . . . . . . . . . .    6,444      6,841     8,419
                                                                        ========  =========  ========
     Diluted loss per share. . . . . . . . . . . . . . . . . . . . . .  $ (1.28)  $  (1.93)  $ (0.68)
                                                                        ========  =========  ========
</TABLE>

10.  COMMITMENTS  AND  CONTINGENCIES

     The Company leases various office facilities under non-cancelable operating
lease  agreements.  Rent  expense  amounted  to  $3,100,000,  $2,656,000  and  $
2,541,000  for  the years ended December 31, 1999, 2000, and 2001, respectively.


                                  Page 45 of 51
<PAGE>
     At  December  31,  2001,  future  lease  payments  (in  thousands)  under
non-cancelable  leases  with  terms  of  more  than  one  year  are  as follows:

                                  Lease    Sublease
                                Payments   Receipts
                                ---------  ---------
                2002 . . . . .  $   2,444  $   1,120
                2003 . . . . .      2,037      1,043
                2004 . . . . .        882        519
                2005 . . . . .        333          -
                2006 . . . . .         51          -
                Thereafter              -          -
                                ---------  ---------
                                    5,747  $   2,682
                                           =========
                Less subleases      2,682
                                ---------
                     Total . .  $   3,065
                                =========

     The Company has employment agreements with certain officers and key members
of  management of the Company, which automatically renew for one-year terms. The
agreements  provide  for  minimum  salary  levels,  incentive  bonuses  at  the
discretion  of the Company's Board of Directors and customary benefits including
insurance  coverage.  In addition, the employment agreements further provide for
severance  pay  ranging  from  six  months to two year's base salary, bonus, and
benefits,  depending on the cause of termination and in the event of a change in
corporate  control.

     From  time  to  time,  the  Company is a party to routine litigation in the
ordinary  course  of business. The Company does not believe that such litigation
will  have  a  material  impact  on  the  financial  statements.

11.EMPLOYEE  BENEFIT  PLANS

401(k)  Plan

     The Company sponsors a 401(k) profit sharing plan (the "401(k) Plan") which
covers  substantially  all  of  its  U.S.  employees.  Employees are eligible to
participate  after  completing three months of service. The 401(k) Plan provides
for  elective  contributions by employees up to the maximum limit allowed by the
Internal  Revenue Code. The Company currently matches 50% of the amount deferred
by  participants,  on  deferral amounts up to 7.5% of compensation. Although the
Company  has  not made any profit sharing contributions, the 401(k) Plan permits
the  Company to make a discretionary profit sharing contribution which, if made,
is  allocated  to the accounts of participants who have been credited with 1,000
hours  of  service  during a plan year and who are employed on the last day of a
plan  year. The Company made matching contributions equal to $0.50 for the years
ended  December  31,  1999,  2000  and  2001  for each dollar contributed to the
401(k) Plan, subject to the limits noted above, by employees. These amounts have
been  included  in  general  and  administrative  expenses  on the statements of
operations.  An employee is fully vested in the matching contributions after six
years  of  employment, or earlier upon attainment of appropriate retirement age,
upon retirement due to disability, or upon death. The Company made contributions
to  the  401(k)  Plan  aggregating approximately $648,000, $287,000 and $117,000
during  the  years ended December 31, 1999, 2000 and 2001, respectively. Payment
of  benefits  is  generally  made  in  the  form  of  a  single  lump  sum or in
installments.  The  Company  sponsors  similar  plans  in  Canada and the United
Kingdom  and previously in Mexico, South Africa and Venezuela, pursuant to which
employees  may  defer  specified  percentages  of compensation which the Company
matches  at  a  rate  of  50-100%  on  the  first 3-5% of compensation deferred.

Incentive  Compensation  and  Profit  Sharing  Policies

     The  Company  has  implemented  incentive  compensation  and profit sharing
policies that cover substantially all salaried employees. Employees in positions
at  project  manager or below, as well as administrative staff, are eligible for
discretionary profit sharing payments. Each employee's profit sharing payment is
based  on a formula and is contingent upon his or her level of salary and length
of  service. Employees in positions at project manager or above are eligible for
incentive  compensation payments based on satisfaction of applicable performance
criteria.  The  Company  approved  and  made  incentive  compensation and profit
sharing  payments  aggregating  approximately  $2,882,000,  $1,304,000  and
$1,586,000  for the years ended December 31, 1999, 2000, and 2001, respectively,
which  are  included  in  sales,  general  and  administrative  expense.


                                  Page 46 of 51
<PAGE>
12.  RESTRUCTURING  CHARGE  AND  LEASE  ABANDONMENT

     During the three month period ended March 31, 2000, the Company implemented
a  plan  to  address the dramatic decline in training and documentation activity
for  enterprise  resource  planning  implementations.  The  plan  consisted  of
regional  base  consolidations  and  downsizing  of  billable  and  non-billable
personnel.  Charges  included  the  costs  of  involuntary  employee termination
benefits,  write-down  of  certain  property  and  equipment  and  reserves  for
leasehold  abandonment.

     The  reduction  in  workforce  consisted  of 60 billable consultants and 44
non-billable  administrative  personnel.  Substantially  all  of  the  employee
terminations  were  completed  during  the first quarter. The Company recognized
approximately  $1.5  million  expense  attributable  to  involuntary  employee
termination  benefits  during  the  first  quarter,  of which approximately $1.2
million  had  been  paid  at  December  31,  2000. The remaining $0.3 million in
termination  pay  was  paid  during  2001.

     During  the  three  months  ended  March  31,  2000  the  Company  reserved
approximately  $0.9  million  related  to  the  abandonment  of  leases  and
approximately  $1.0  million related to the writedown of leasehold improvements,
furniture and equipment held by its Americas division. During the fourth quarter
of  2000  due  to  weakening  in the real estate market, the Company recorded an
additional  $1.3  million  reserve  for  lease  abandonment resulting in a total
annual  charge  of  $2.2  million.  During  2000  payments of approximately $0.8
million  were  charged against the reserve for lease abandonment, resulting in a
remaining  reserve  at  December  31,  2000  of  approximately  $1.4  million.

     During  the  three  months  ended June 30, 2001 the Company recorded a $0.8
million  charge  for  the  abandonment  of  additional  leases.  The  charge was
included  in  general  and administrative costs.  Payments for unutilized leased
office space totaling $1.1 million were charged against the reserve in 2001.  At
December  31, 2001, the Company has a remaining accrual of $1.1 million of which
$0.8  million  is  included  in  long  term  liabilities.

13.  SUPPLEMENTAL  DISCLOSURES  OF  CASH  FLOW  INFORMATION

<TABLE>
<CAPTION>
                                                                    YEARS ENDED DECEMBER, 31
                                                                      1999      2000     2001
                                                                    --------  --------  ------
<S>                                                                 <C>       <C>       <C>
Cash paid (received) for interest and income taxes (in thousands):
     Interest. . . . . . . . . . . . . . . . . . . . . . . . . . .  $     -   $    74   $    62
     Income taxes. . . . . . . . . . . . . . . . . . . . . . . . .   (1,198)   (2,697)        -

Non-cash activities were (in thousands):
     Exercise of stock options using Company stock . . . . . . . .  $   146   $     -   $     -
</TABLE>


                                  Page 47 of 51
<PAGE>
14.  SEGMENT  REPORTING

     In  1998,  the Company adopted SFAS No. 131, "Disclosures about Segments of
an  Enterprise and Related Information."  SFAS No. 131 establishes standards for
reporting  information about operating segments and geographic areas.  Operating
segments  are  defined  as  components  of  an  enterprise  about which separate
financial  information is available that is evaluated regularly by the Company's
chief  decision  making group.  This group is comprised of senior management who
are  responsible  for  the  allocation  of resources and assessment of operating
performance.

     Because the Company's operations are geographically based, the organization
is divided into three operating divisions: the Americas Division, which includes
its  operations  in  North  America;  the  EMEA  Division,  which  includes  its
operations  in  Europe,  and  the  Asia  Pacific  Division,  which  includes its
operations  in  Australia,  Singapore  and  Asia.  The Company provides employee
education  and support services to companies investing in business technology in
all  geographic  regions.

     The  Company's  reportable  segment  information  was  as  follows:

<TABLE>
<CAPTION>
                                                EUROPE,
                                              MIDDLE EAST
(in thousands)                    AMERICAS     & AFRICA      ASIA PACIFIC     TOTAL
                                 ----------  -------------  --------------  ---------
<S>                              <C>         <C>            <C>             <C>
YEAR ENDED DECEMBER 31, 1999
  Revenue . . . . . . . . . . .  $  41,500   $     20,505   $       8,290   $ 70,295
  Operating loss. . . . . . . .     (7,703)        (2,306)         (1,575)   (11,584)
  Total assets. . . . . . . . .     24,409          6,432           2,077     32,918
  Capital expenditures. . . . .      4,739          1,310             200      6,249
  Depreciation and amortization      2,190            298              72      2,560
YEAR ENDED DECEMBER 31, 2000
  Revenue . . . . . . . . . . .  $  11,834   $     12,476   $       6,679   $ 30,989
  Operating loss. . . . . . . .    (12,363)        (5,033)         (3,193)   (20,589)
  Total assets. . . . . . . . .     14,872          6,440           3,628     24,940
  Capital expenditures. . . . .        151             34              68        253
  Depreciation and amortization      1,530          1,076             404      3,010
YEAR ENDED DECEMBER 31, 2001
  Revenue . . . . . . . . . . .  $   5,389   $     17,144   $       6,121   $ 28,654
  Operating income (loss) . . .     (3,320)           391              62     (2,867)
  Total assets. . . . . . . . .      6,630          7,419           3,163     17,212
  Capital expenditures . . . .          4             34              16         54
  Depreciation and amortization        695          1,205             406      2,306
</TABLE>


                                  Page 48 of 51
<PAGE>
15.  QUARTERLY OPERATING RESULTS (UNAUDITED)

     The  following tables set forth unaudited income statement data for each of
the  eight  quarters in the period beginning January 1, 2000 and ending December
31,  2001,  as well as the percentage of the Company's total revenue represented
by  each  item.  In  management's  opinion,  this unaudited information has been
prepared  on  a  basis  consistent  with  the Company's audited annual financial
statements  and  includes  all  adjustments (consisting only of normal recurring
adjustments)  necessary  for  a  fair  presentation  of  the information for the
quarters  presented,  when read in conjunction with the Financial Statements and
related  Notes  thereto  included  elsewhere in this Yearly Report Form 10K. The
operating  results for any quarter are not necessarily indicative of results for
any  future  period.

<TABLE>
<CAPTION>
                                                                          THREE MONTH PERIOD ENDED
                                          --------------------------------------------------------------------------------------
                                           MARCH 31,    JUNE 30,    SEPT. 30,    DEC. 31,    MARCH 31,    JUNE 30,    SEPT. 30,
                                             2000         2000        2000         2000        2001         2001        2001
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
<S>                                       <C>          <C>         <C>          <C>         <C>          <C>         <C>
INCOME STATEMENT DATA:
                                                                    (in thousands except per share amounts)
  Revenue. . . . . . . . . . . . . . . .  $    6,369   $   8,020   $    8,148   $   8,452   $    8,536   $   7,607   $    5,843
  Cost of revenue. . . . . . . . . . . .       5,928       5,262        4,224       5,242        4,993       4,572        3,332
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Gross profit . . . . . . . . . . . . .         441       2,758        3,924       3,210        3,543       3,035        2,511
  Selling and marketing expense. . . . .       1,418       1,305        1,154       1,068        1,058         987          606
  Development expense. . . . . . . . . .         469       1,732          923         543          458         174           28
  General and administrative expense . .       5,926       4,214        3,550       3,194        3,375       2,851        2,074
  Amortization expense . . . . . . . . .         192         191          189         188          148         148          148
  Restructuring charge                         3,354           -            -       1,312            -           -            -
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Operating income (loss). . . . . . . .     (10,918)     (4,684)      (1,892)     (3,095)      (1,496)     (1,125)        (345)
  Other income (expense), net. . . . . .          26         (30)          58         (29)           0         (39)        (243)
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Income (loss) before taxes . . . . . .     (10,892)     (4,714)      (1,834)     (3,124)      (1,496)     (1,164)        (588)
  Provision (benefit) for income taxes .      (3,423)     (1,641)        (950)     (1,333)        (548)      3,185          (30)
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Net  income (loss) . . . . . . . . . .  $   (7,469)  $  (3,073)  $     (884)  $  (1,791)  $     (948)  $  (4,349)  $     (558)
                                          ===========  ==========  ===========  ==========  ===========  ==========  ===========
  Basic earnings (loss) per share. . . .  $    (1.16)  $   (0.48)  $    (0.14)  $   (0.22)  $    (0.11)  $   (0.52)  $    (0.07)
  Weighted average shares outstanding. .       6,418       6,419        6,419       8,093        8,419       8,419        8,419
  Diluted earnings (loss) per share. . .  $    (1.16)  $    (.48)  $     (.14)  $    (.22)  $    (0.11)  $   (0.52)  $    (0.07)
  Weighted average shares outstanding. .       6,418       6,419        6,419       8,093        8,419       8,419        8,419
                                                                           As a percent of revenue
  Revenue. . . . . . . . . . . . . . . .       100.0%      100.0%       100.0%      100.0%       100.0%      100.0%       100.0%
  Cost of revenue. . . . . . . . . . . .        93.1        65.6         51.8        62.0         58.5        60.1         57.0
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Gross profit . . . . . . . . . . . . .         6.9        34.4         48.2        38.0         41.5        39.9         43.0
  Selling and marketing expense. . . . .        22.3        16.3         14.2        12.6         12.4        13.0         10.4
  Development expense. . . . . . . . . .         7.3        21.6         11.3         6.4          5.4         2.3          0.5
  General and administrative expense . .        93.0        52.5         43.6        37.8         39.5        37.5         35.5
  Amortization expense . . . . . . . . .         3.0         2.4          2.3         2.1          1.7         1.9          2.5
  Restructuring. . . . . . . . . . . . .        52.7         ---          ---        15.5          ---         ---          ---%
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Operating income (loss). . . . . . . .      (171.4)      (58.4)       (23.2)      (36.6)       (17.5)      (14.8)        (5.9)
  Other income (expense), net. . . . . .         0.4        (0.4)         0.7        (0.4)           -        (0.5)        (4.2)
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Income (loss) before taxes . . . . . .      (171.0)      (58.8)       (22.5)      (37.0)       (17.5)      (15.3)       (10.1)
  Provision (benefit) for income taxes .       (53.7)      (20.5)       (11.7)      (15.8)        (6.4)       41.9         (0.6)
                                          -----------  ----------  -----------  ----------  -----------  ----------  -----------
  Net income (loss). . . . . . . . . . .     (117.3)%     (38.3)%      (10.8)%     (21.2)%      (11.1)%     (57.2)%       (9.5)%
                                          ===========  ==========  ===========  ==========  ===========  ==========  ===========

                                          ----------
                                           DEC. 31,
                                             2001
                                          ----------
<S>                                       <C>
INCOME STATEMENT DATA:
  Revenue. . . . . . . . . . . . . . . .  $   6,668
  Cost of revenue. . . . . . . . . . . .      3,639
                                          ----------
  Gross profit . . . . . . . . . . . . .      3,029
  Selling and marketing expense. . . . .        629
  Development expense. . . . . . . . . .         42
  General and administrative expense . .      2,111
  Amortization expense . . . . . . . . .        148
   Restructuring charge                           -
                                          ----------
  Operating income (loss). . . . . . . .         99
  Other income (expense), net. . . . . .        (44)
                                          ----------
  Income (loss) before taxes . . . . . .         55
  Provision (benefit) for income taxes .       (100)
                                          ----------
  Net  income (loss) . . . . . . . . . .  $     155
                                          ==========
  Basic earnings (loss) per share. . . .  $    0.02
  Weighted average shares outstanding. .      8,419
  Diluted earnings (loss) per share. . .  $    0.02
  Weighted average shares outstanding. .      8,419
           As a percent of revenue
     Revenue . . . . . . . . . . . . . .      100.0%
  Cost of revenue. . . . . . . . . . . .       54.6
                                          ----------
  Gross profit . . . . . . . . . . . . .       45.4
  Selling and marketing expense. . . . .        9.4
  Development expense. . . . . . . . . .        0.6
  General and administrative expense . .       31.7
  Amortization expense . . . . . . . . .        2.2
  Restructuring. . . . . . . . . . . . .        ---%
                                          ----------
  Operating income (loss). . . . . . . .        1.5
  Other income (expense), net. . . . . .       (0.7)
                                          ----------
  Income (loss) before taxes . . . . . .        0.8
  Provision (benefit) for income taxes .       (1.5)
                                          ----------
  Net income (loss). . . . . . . . . . .        2.3%
                                          ==========
</TABLE>


                                  Page 49 of 51
<PAGE>