<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON,  D.C.  20549

                                   FORM 10-Q

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

        FOR QUARTER ENDED JUNE 30, 1999  COMMISSION FILE NUMBER 1-7516

                                  KEANE, INC.
            (Exact name of registrant as specified in its charter)


              MASSACHUSETTS                                     04-2437166
     (State or other jurisdictions of                        (I.R.S. Employer
     incorporation or organization)                       Identification Number)

     Ten City Square, Boston, Massachusetts                        02129
     (Address of principal executive offices)                   (Zip Code)

     Registrant's telephone number, including area code       (617) 241-9200

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
    -----        -----

As of June 30, 1999, the number of issued and outstanding shares of Common Stock
(excluding 491,973 shares held in treasury) and Class B Common Stock were
71,332,503 and 285,213 shares, respectively.

                                    1 of 17
<PAGE>

Keane, Inc. and Subsidiaries
TABLE OF CONTENTS

<TABLE>
<S>                                                                         <C>
Part I - Financial Information

Consolidated Statements of Income for the three months and six months
ended June 30, 1999 and 1998.............................................    3

Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998....    4

Consolidated Statements of Cash Flows for the six months ended June 30,
1999 and 1998............................................................    5

Notes to Unaudited Financial Statements..................................    6

Management's Discussion and Analysis of Financial Condition and Results
of Operations............................................................    8

Part II - Other Information..............................................   16

Signature Page...........................................................   18
</TABLE>

                                       2
<PAGE>

KEANE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                         (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                                                    THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                         JUNE 30                         JUNE 30
                                                                  1999               1998          1999          1998
<S>                                                            <C>               <C>            <C>           <C>
Total revenues                                                  $280,465          $266,904       $565,469      $496,960

Salaries, wages and other direct costs                           180,806           172,784        364,700       322,354
Selling, general and administrative expenses                      53,917            47,094        103,500        88,612
Amortization of goodwill and other intangible
         assets                                                    2,306             1,921          4,282         3,565
Merger costs                                                                         4,132                        4,132

     Operating income                                             43,436            40,973         92,987        78,297

Investment income                                                  1,807             1,439          3,642         2,651
Interest expense                                                                       (47)                           2
Other expenses, net                                                  482                57            721           244

     Income before income taxes                                   44,761            42,402         95,908        80,702

Provision for income taxes                                        18,128            19,702         39,097        35,218

     Net income                                                 $ 26,633          $ 22,700       $ 56,811      $ 45,484

Net income per share (basic)                                        $.37              $.32           $.79          $.64

Net income per share (diluted)                                      $.37              $.31           $.78          $.63

Weighted average common shares outstanding (basic)                71,684            71,010         71,623        70,812

Weighted average common shares and common share
 equivalents outstanding (diluted)                                72,481            72,256         72,451        72,215
</TABLE>
                The accompanying notes are an integral part of
                    the consolidated financial statements.

                                       3
<PAGE>

KEANE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 (IN THOUSANDS)
                                                                        JUNE 30, 1999    DECEMBER 31, 1998
<S>                                                                    <C>              <C>
Assets
Current:
     Cash and cash equivalents                                            $ 43,014            $ 51,696
     Short term investments                                                  7,683               6,165
     Accounts receivable, net
          Trade                                                            250,887             229,457
          Other                                                              4,272               1,573
     Prepaid expenses and other current assets                              25,192              23,376
                                                                          --------            --------
          Total current assets                                             331,048             312,267

Long term investments                                                       73,551              71,368
Property and equipment, net                                                 31,290              29,973
Intangible assets, net                                                      62,688              35,714
Other assets, net                                                           10,046               8,238
                                                                          --------            --------
                                                                          $508,623            $457,560
                                                                          ========            ========
Liabilities
Current:
     Accounts payable                                                       15,574            $ 20,222
     Accrued compensation                                                   30,906              30,647
     Accrued expenses and other liabilities                                 26,828              25,429
     Notes payable                                                           6,941               1,000
     Accrued income taxes                                                    2,797              13,548
     Capital lease obligations                                               1,013                 954
                                                                          --------            --------
          Total current liabilities                                         84,059              91,800

Long-term portion of capital lease obligations                               1,550               1,976

Stockholders' Equity
     Common Stock                                                            7,182               7,136
     Class B Common Stock                                                       29                  29
     Additional paid-in capital                                            116,208             109,606
     Foreign currency translation                                             (222)               (764)
     Retained earnings                                                     307,357             250,546
     Less treasury stock                                                    (7,540)             (2,769)
                                                                          --------            --------
          Total stockholders' equity                                       423,014             363,784
                                                                          --------            --------
                                                                          $508,623            $457,560
                                                                          ========            ========
</TABLE>
                The accompanying notes are an integral part of
                    the consolidated financial statements.

                                       4
<PAGE>

KEANE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           (IN THOUSANDS)
                                                                                      SIX  MONTHS ENDED JUNE 30,
CASH FLOWS FROM OPERATING ACTIVITIES:                                                 1999                  1998
<S>                                                                            <C>                   <C>
Net income                                                                         $ 56,811              $ 44,834
Adjustments to reconcile net income to net cash provided by (used
 for) operating activities
       Depreciation and amortization                                                 11,717                 9,354
       Deferred income taxes                                                         (4,828)               (2,000)
       Provision for doubtful accounts                                                1,285                 4,865
       (Gain) Loss on disposal of fixed assets                                           33                    (1)
     Changes in assets and liabilities, net of acquisitions:
       (Increase) in accounts receivable                                            (21,037)              (74,840)
       Decrease in prepaid expenses and other assets                                  3,238                 2,120
       Increase (decrease) in income taxes payable                                  (10,751)                4,851
       Increase in accounts payable, accrued expenses, and other
         current liabilities                                                        (19,221)               11,730
                                                                                   --------              --------
     NET CASH PROVIDED BY OPERATING ACTIVITIES                                       17,247                   913


CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of investments                                                        (46,478)              (33,254)
     Sale of investments                                                             42,777                38,980
     Purchase of property and equipment                                              (8,241)               (7,980)
     Proceeds from sale of assets                                                        44                     5
     Payment for acquisitions                                                       (20,984)               (9,150)
                                                                                   ========              ========
     NET CASH (USED FOR) INVESTING ACTIVITIES                                       (32,882)              (11,399)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Borrowings under notes payable and long term-debt                                5,441                  (602)
     Payments under long term-debt                                                                         (3,150)
     Capital lease obligations                                                         (367)                  428
     Purchase of treasury stock                                                      (4,771)                  586
     Proceeds from issuance of common stock                                           6,650                 3,029
                                                                                   --------              --------
     NET CASH PROVIDED BY FINANCING ACTIVITIES                                        6,953                   291
                                                                                   --------              --------

Net  decrease in cash and cash equivalents                                           (8,682)              (10,195)
Cash and cash equivalents, beginning of period                                       51,696                40,276
                                                                                   --------              --------
Cash and cash equivalents at end of period                                         $ 43,014              $ 30,081
                                                                                   ========              ========
</TABLE>
                The accompanying notes are an integral part of
                    the consolidated financial statements.

                                       5
<PAGE>

KEANE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1.   The accompanying unaudited consolidated financial statements have been
          prepared in accordance with the accounting policies described in the
          Company's Annual Report on Form 10-K for the year ended December 31,
          1998 (the "Annual Report") and should be read in conjunction with the
          disclosures therein.  All financial figures are in thousands of
          dollars, except per share amounts. Prior period amounts have been
          restated to conform to current year presentation.

          In the opinion of management, these interim financial statements
          reflect all adjustments, consisting of normal recurring accruals,
          necessary to present fairly the financial position, results of
          operations and cash flows for the periods presented. Interim results
          are not necessarily indicative of results for the full year.

          During 1998, the Company completed five acquisitions.  Four of the
          acquisitions were accounted for as poolings-of-interests and one was
          accounted for as a purchase.  The accompanying financial statements
          and notes have been restated for all periods presented for the three
          material pooling-of-interests acquisitions.

Note 2.   Computation of earnings per share for the three months and six months
          ending June 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED               SIX MONTHS ENDED
                                                           JUNE 30                         JUNE 30
                                                     1999            1998            1999            1998
<S>                                                <C>             <C>             <C>             <C>
Net income                                          $26,633         $22,700         $56,811         $45,484

Weighted average number of common                    71,684          71,010          71,623          70,812
Shares outstanding used in calculation
of basic earnings per share

Incremental shares from the assumed                     797           1,246             828           1,403
 exercise of dilutive stock options

Weighted average number of common shares             72,481          72,256          72,451          72,215
 outstanding used in calculation of
 diluted earnings per share

Earnings per share

             Basic                                  $   .37         $   .32         $   .79         $   .64
                                                    =======         =======         =======         =======

             Diluted                                $   .37         $   .31         $   .78         $   .63
                                                    =======         =======         =======         =======
</TABLE>

                                       6
<PAGE>

KEANE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Note 3.  Intangible assets consist of the following:    6/30/99        12/31/98
<S>                                                    <C>           <C>
Goodwill                                               $ 54,853       $  23,695
Noncompetition agreements                                 1,000           2,268
Customer-based intangibles                               44,436          44,501
Software                                                  2,534           5,618
Other                                                        83             273
                                                       --------       ---------
                                                        102,906          76,355
Less accumulated amortization                            40,218          40,641
                                                       --------       ---------
                                                       $ 62,688       $  35,714
                                                       ========       =========
</TABLE>

                                       7
<PAGE>

KEANE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The Quarterly Report on Form 10-Q contains forward-looking statements.  For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements.  Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," and similar
expressions are intended to identify forward-looking statements.  There are a
number of important factors that could cause the Company's actual results to
differ materially from those indicated by such forward-looking statements.
These factors include, without limitation, those set forth below under the
caption "Certain Factors That May Affect Future Results."

RESULTS OF OPERATIONS
---------------------

The Company's revenue for the second quarter of 1999 was $280.5 million, a
5.1% increase from $266.9 million in the second quarter of 1998. The Company's
revenue for the first six months of 1999 were $565.5 million, a 13.8% increase
from $497.0 million in the first six months of 1998. The Company's growth rate
for 1999 is being negatively impacted by the rapid completion of its Year 2000
compliance projects. The Company's revenue growth in the plan, build and manage
services, excluding its Year 2000 compliance services, for the second quarter of
1999 was $ 219.4 million, up 27.8% from the second quarter last year revenue of
$ 171.7 million, while Year 2000 compliance revenues for the second quarter were
$ 61.1 million down 35.8% from the second quarter last year revenue of
95.2 million. For the first six months of 1999 plan, build and manage revenues,
excluding Year 2000 compliance revenue, were $ 424.4 million, up 29.6% from the
six months of last year revenue of $ 327.4 million, while Year 2000 compliance
revenues for the first six months of 1999 were $ 141.1 million, down 16.8% from
the first six months last year revenue of $ 169.6 million.

Despite the above period-to-period growth in its non-Year 2000 services, the
Company is experiencing, and expects to continue to experience through at least
December 31,1999, a slowdown in its non-Year 2000 services due to increased
reluctance of its customers to implement new IT projects until all outstanding
Year 200 issues are resolved.

The Company expects Year 2000 compliance revenues to continue to decline for the
remainder of 1999. Year 2000 compliance revenues represented 21.8% of the
Company's total revenue as of the second quarter and represented 25.0% of
revenues for the first six months compared to 35.7% and 34.1% respectfully for
the same period last year.

Salaries, wages and other direct costs for the second quarter of 1999 were
$180.8 million, or 64.5% of revenue, compared to $172.8 million, or 64.7% of
revenue, during the same period last year. Salaries, wages and other direct
costs for the first six months of 1999 were $364.7 million, or 64.5% of revenue,
compared to $322.4 million, or 64.9% of revenue, during the same period last
year. This decrease as a percentage of revenue was primarily attributable to an
increase in the Company's higher margin plan and build services business,
excluding Year 2000 compliance projects.  Plan and build services comprised
approximately $117.1 million, or 41.8% of the Company's revenue in the second
quarter of 1999 compared to approximately $85.8 million, or 32.1% for the same
period last year and

                                       8
<PAGE>

approximately $224.0 million, or 39.6% of the Company's revenue, for the first
six months of 1999 compared to $164.6 million, or 33.1% for the same period last
year.

Selling, general and administrative expenses (SG&A) for the second quarter of
1999 were $53.9 million, or 19.2% of revenue, compared to $47.1 million, or
17.6% of revenue, for the same period last year. SG&A expenses for the first
6 months of 1999 were $103.5 million, or 18.3% of revenue, compared to
$88.6 million, or 17.8% of revenue, for the same period last year. The increase
in SG&A as a percentage of revenue was primarily attributable to the decrease in
the Company's revenue growth rate. As a result of the he Company's Year 2000
compliance services being completed at a slightly faster rate than expected.
The Company is taking corrective action in the third quarter to reduce SG&A to
be in line with the revised revenue projections for the remainder of 1999.

Amortization of goodwill and other intangible assets for the second quarter of
1999 totaled $2.3 million, or .8% of revenue, compared to $1.9 million, or
 .7% of revenue, for the same period last year. Amortization of goodwill and
capitalized acquisition costs for the first six months of 1999 were
$4.3 million, or .8% of revenue, compared to $3.6 million, or .7% of revenue,
for the same period last year. The increase in amortization is primarily
attributable to certain intangible assets acquired during 1999 as a result of
acquisitions.

The Company recognized investment income of $1.8 million in the second quarter
of 1999 and $3.6 million in the first six months of 1999, compared to $1.4 and
$2.6 million, respectively, for the comparable periods last year. The increase
in investment income is attributed to a larger investment balance compared to
last year.

The Company's pre-tax income for the second quarter of 1999 was $44.8 million,
or 16.0% of revenue, compared to $42.4 million, or 15.9% of revenue, for the
same period last year.  Pre-tax income for the first six months of 1999 was
$95.9 million, or 17.0% of revenue, compared to $80.7 million, or 16.2% of
revenue, for the same period last year.

The Company's effective tax rate for the second quarter of 1999 was 40.5%,
compared to 46.4% for the same period last year. The Company's effective tax
rate for the first six months of 1999 was 40.8%, compared to 43.6% for the same
period last year. The decrease in the effective tax rate was primarily due to a
decrease in the Company's state income taxes.

Net income and earnings per share basic and diluted for the second quarter of
1999 were $26.6 million, $.37 per share and $.37 per share, respectively,
compared to $22.7 million, $.32 per share and $.31 per share, respectively, for
the same period last year.  Net income and earnings per share basic and diluted
for the six months ended June 30, 1999 were $56.8 million, $.79 per share and
$.78 per share, respectively, compared to $45.5 million, $.64 per share and $.63
per share, respectively, for the same period last year. The increase in net
income and earnings per share is attributable to an increase in the Company's
higher margin plan and build service business. In the case of earnings per
share, the increase is also attributable in part to the Company's repurchasing
of 175,000 shares of common stock.

                                       9
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Company ended the second quarter of 1999 with cash and investments totaling
approximately $124.0 million, down $ 5.0 million from the year end balance but
up $ 54.0 million compared to the second quarter of 1998.  During the quarter,
the Company's Board of Directors authorized the repurchase of up to 1,000,000
million shares of common stock until May 25, 2000. As a result, 175,000 shares
were repurchased during the second quarter. The Company maintains and has
available a $20 million unsecured demand line of credit split equally between
two major Boston banks.

Based on the Company's current operating plan, it believes that its cash and
cash equivalents on hand, cash flows from operations, and its current available
line of credit will be sufficient to meet its current working capital
requirements during at least the next twelve months.

IMPACT OF INFLATION AND CHANGING PRICES
---------------------------------------

Inflationary increases in costs have not been material in recent years and, to
the extent permitted by competitive pressures, are passed on to the clients
through increased billing rates. Rates charged by the Company are based on the
cost of labor and market conditions within the industry.  The Company was able
to increase its billing rates over its increases in direct labor costs in 1999.
This is due primarily to the Company's increase in client strategic services in
which competition is less and the quality of services commands higher rates.

YEAR 2000 ISSUES
----------------

OVERVIEW

The "Year 2000" issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Keane's computer
equipment and software and devices with embedded technology that are time
sensitive may recognize "00" as the year 1900 rather than the Year 2000.
This could result in a system failure or miscalculations causing disruptions of
Keane's operations, including, among other things, a temporary inability to
perform mission critical functions like billing and time reporting. As a result,
software and computer systems may need to be upgraded or replaced in order to
ensure that they accept four digit date codes.

STATE OF READINESS

COMPANY SERVICES AND PRODUCTS. Keane generally delivers services and not
-----------------------------
products to its customers. The Company believes that the services provided by
its professionals to its customers are provided in a Year 2000 compliant manner.

As part of its build services, Keane develops, markets and sells software
products through its Healthcare Solutions Practice.  Certain of these products
are not fully Year 2000 operable.  Keane has advised its customer base for these
products that it does not intend to offer Year 2000 compliant versions of these
products and has encouraged them to migrate to new products offered by Keane
that are Year 2000 compliant.  The Company anticipates that some customers will
choose not to migrate to these products and will therefore terminate their
relationship with Keane's Healthcare Solutions Practice.

                                       10
<PAGE>

The exact amount of anticipated lost customers has not been determined.
The Company believes that the revenue lost as a result of these events will be
immaterial to its overall operations.

In addition to its own products, Keane markets certain third party software
products through its Healthcare Solutions Practice.  The Company is seeking
assurances from the vendors of these products that all licensed software is
Year 2000 compliant. The Company received substantially all of these assurances
in the first quarter of 1999.

COMPANY SYSTEMS.  Keane has established a Year 2000 task force that has
---------------
completed its assessment of the Company's Information Technology-related
("IT-related") systems for the Year 2000 issue. For IT-related systems, the
Company believes that most of the critical systems, including its accounting
software, AS400 applications and payroll systems, are now Year 2000 compliant.
The Company replaced its billing software effective the beginning of the third
quarter, because the previous software product is not Year 2000 compliant.
The cost to replace the software was approximately $500,000.

Keane's Year 2000 task force has also completed its evaluation of the Company's
non-IT systems, including alarm systems, sprinkler systems, elevators, fax
machines and other miscellaneous systems that may contain embedded technology,
for the Year 2000 Issue during the first quarter of 1999.  Keane has established
a remediation plan to address any outstanding Year 2000 Issues concerning the
Company's non-IT systems.

COSTS TO ADDRESS YEAR 2000 ISSUES

Keane anticipates that it will incur direct costs to modify or replace existing
systems used by Keane in the operation of its business to ensure that all
systems will be operable in the Year 2000, including the costs to replace its
billing software described above.  The Company believes that the total amounts
spent by it to date and that it expects to spend in 1999 addressing the Year
2000 issue are not material.

RISKS TO THE COMPANY

In the event of a failure of some or all of the Company's IT-related and non-IT
systems on January 1, 2000, the Company's operations may be substantially
curtailed until the Company or its third-party suppliers develop a solution to
address such system's failure.  In such event, the Company may be unable to:
(a) perform billing functions, (b) keep track of time performed on projects for
its clients, (c) access client records, (d) communicate between field offices
and headquarters, (e) operate its Internet site, (f) receive and send email or
(g) prepare its financial statements for the fourth quarter of 1999 or periods
thereafter.

Among the services that Keane provides are assessment, planning,
migration/remediation and testing services for Year 2000 compliance.  Keane has
devoted significant resources to services that address the Year 2000 problem and
believes the market for these services will decline as the Year 2000 approaches.
Although Keane believes that the demand for its services relating to the Year
2000 problem will continue to exist after the Year 2000, this demand is
diminishing and will continue to diminish significantly over time and will
eventually disappear.

                                       11
<PAGE>

Keane's services addressing the Year 2000 problem involve key aspects of its
clients' computer systems.  A failure in a client's system could result in a
claim for substantial damages against Keane, regardless of Keane's
responsibility for the failure. Keane could incur substantial costs in
connection with any resulting litigation, regardless of the outcome.

CONTINGENCY PLANS

As described above, the Company has identified potential vulnerabilities
associated with the change of the century.  The Company is devoting resources to
working with providers of systems to the Company to ensure that its business is
not substantially interrupted as a result of the date change.  The Company
currently does not have a contingency plan in the event of a particular system
not being Year 2000 compliant. Such a plan will be developed if it becomes clear
that the company is not going to achieve its scheduled compliance objectives.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
----------------------------------------------

The following important factors, among others, could cause actual results to
differ materially from those indicated by forward-looking statements made in
this Quarterly Report on Form 10-Q and presented elsewhere by management from
time to time.

FLUCTUATIONS IN OPERATING RESULTS.  Keane has experienced and expects to
---------------------------------
continue to experience fluctuations in its quarterly results.  Keane's gross
margins vary based on a variety of factors including employee utilization rates
and the number and type of services performed by Keane during a particular
period.  A variety of factors influence Keane's revenue in a particular quarter,
including:

     .  general economic conditions which may influence investment decisions
        or cause downsizing;

     .  the number and requirements of client engagements;

     .  employee utilization rates;

     .  changes in the rates Keane can charge clients for services;

     .  acquisitions; and

     .  other factors, many of which are beyond Keane's control.

A significant portion of Keane's expenses do not vary relative to revenue.  As a
result, if revenue in a particular quarter does not meet expectations, Keane's
operating results could be materially adversely affected, which in turn may have
a material adverse impact on the market price of Keane common stock.  In
addition, many of Keane's engagements are terminable without client penalty.  An
unanticipated termination of a major project could result in an increase in
underutilized employees and a decrease in revenue and profits.

                                       12
<PAGE>

RISKS RELATING TO ACQUISITIONS.  In the past five years, Keane has grown
------------------------------
significantly through acquisitions.  Since January 1, 1998, Keane has completed
the acquisitions of Quantum Associates, Inc. d/b/a Omega Systems in Pittsburgh,
Pennsylvania, GSE Erudite Systems in Salt Lake City, Utah, Bricker & Associates,
Inc. in Chicago, Illinois, Icom Systems Ltd in Birmingham, England, Fourth Tier,
Inc. in El Segundo, California, Emergent Corporation in San Mateo, California,
Advanced Solutions Inc. in New York, New York, Amherst Consulting Group, Inc. in
Boston, Massachusetts, Parallax Solutions Ltd in the United Kingdom and
Jamison/Gold in Marina Del Rey, California.  Keane's future growth may be based
in part on selected acquisitions.  At any given time, Keane may be in various
stages of considering such opportunities.  Keane can provide no assurances that
it will be able to find and identify desirable acquisition targets or that it
will be successful in entering into a definitive agreement with any one target.
Also, even if a definitive agreement is reached, there is no assurance that any
future acquisition will be completed.

Keane typically anticipates that each acquisition will bring certain benefits,
such as an increase in revenue.  Prior to completing an acquisition, however, it
is difficult to determine if such benefits can actually be realized.
Accordingly, there is a risk that an acquired company may not achieve an
increase in revenue or other benefits for Keane.  In addition, an acquisition
may result in unexpected costs and expenses.  Any of these events could have a
material adverse effect on Keane's business, financial condition and results of
operations.

The process of integrating acquired companies into Keane's existing business may
also result in unforeseen difficulties.  Unforeseen operating difficulties may
absorb significant management attention which Keane might otherwise devote to
its existing business.  Also, the process may require significant financial
resources that Keane might otherwise allocate to other activities, including the
ongoing development or expansion of Keane's existing operations.  Finally,
future acquisition could result in Keane having to incur additional debt and/or
contingent liabilities.  All of these possibilities might have a material
adverse effect on Keane's business, financial condition and result of
operations.

DEPENDENCE ON PERSONNEL.  Keane believes that its future success will depend in
-----------------------
large part on its ability to continue to attract and retain highly-skilled
technical and management personnel.  The competition for such personnel is
intense.  Keane may not succeed in attracting and retaining the personnel
necessary to develop its business.  If Keane does not, its business, financial
condition and result of operations could be materially adversely affected.

HIGHLY COMPETITIVE MARKET.  The market for Keane's services is highly
-------------------------
competitive.  The technology for custom software services can change rapidly.
The market is fragmented, and no company holds a dominant position.
Consequently, Keane's competition for client assignments and experienced
personnel varies significantly from city to city and by the type of service
provided.  Some of Keane's competitors are larger and have greater technical,
financial and marketing resources and greater name recognition in the markets
they serve than does Keane.  In addition, clients may elect to increase their
internal information systems resources to satisfy their custom software
development needs.

                                       13
<PAGE>

Keane believes that in order to compete successfully in the software services
industry it must be able to:

     .  compete cost-effectively;

     .  develop strong client relationships;

     .  generate recurring revenues;

     .  utilize comprehensive delivery methodologies; and

     .  achieve organizational learning by implementing standard operational
        processes.

Keane may not be able to compete successfully against current or future
competitors.  In addition, competitive pressures faced by Keane may materially
adversely affect its business, financial condition and results of operations.

YEAR 2000 COMPLIANCE; RISKS ASSOCIATED WITH PROVISION OF YEAR 2000 SERVICES.
---------------------------------------------------------------------------
Keane has reviewed its internal computer systems and has identified certain
internal systems that are not Year 2000 compatible (i.e., such systems use only
two digits to represent the year in date data fields and, consequently, may not
accurately distinguish between the 20th and 21st centuries or may not function
properly at the turn of the century).  Keane is in the process of correcting
these systems or replacing them with Year 2000 compliant systems.  Keane expects
to implement successfully the systems and programming changes necessary to
address Year 2000 issues and does not believe that the cost of such actions will
have a material effect on Keane's financial condition or results of operations.
There may, however, be a delay in, or increased costs associated with, the
implementation of these changes.  Keane's inability to implement changes could
have a material adverse effect on Keane's business, financial condition or
results of operations.

Among the services that Keane provides are assessment, planning,
migration/remediation and testing services for Year 2000 compliance.  Keane has
devoted significant resources to services that address the Year 2000 problem and
believes the market for these services will decline as the Year 2000 approaches.
Although Keane believes that the demand for its services relating to the Year
2000 problem will continue to exist after the Year 2000, this demand will
diminish significantly over time and will eventually disappear.

Keane's services addressing the Year 2000 problem involve key aspects of its
clients' computer systems.  A failure in a client's system could result in a
claim for substantial damages against Keane, regardless of Keane's
responsibility for the failure.  Keane could incur substantial costs in
connection with any resulting litigation, regardless of the outcome.

INTERNATIONAL OPERATIONS.  Keane commenced operations in the United Kingdom with
------------------------
its acquisition of Icom Systems Ltd, now known as Keane Limited, in August 1998
and acquired Parallax Solutions Ltd in the United Kingdom in May 1999.  Keane's
international operations will be subject to political and economic
uncertainties, currency exchange rate fluctuations, foreign exchange
restrictions, changes in taxation and other difficulties in managing operations
overseas.  Keane may not be successful in its international operations.

                                       14
<PAGE>

As a result of these and other factors, the Company's past financial performance
should not be relied on as an indication of future performance. Keane believes
that period to period comparisons of its financial results are not necessarily
meaningful and it expects that results of operations may fluctuate from period
to period in the future.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.  Market risks were
-----------------------------------------------------------
reported in the Company's Annual Report on Form 10-K for the year ended December
31, 1998.  There have been no material changes in these risks since the end of
the year.

                                       15
<PAGE>

KEANE, INC. AND SUBSIDIARIES

                          PART II - OTHER INFORMATION
--------------------------------------------------------------------------------

Item 4.  Submission of Matters to a Vote of Security Holders

         The 1999 Annual Meeting of Stockholders of the Company was held on
         May 26, 1999. The Stockholders approved the election of the seven
         nominees named below and ratified the selection of Ernst & Young LLP as
         the Company's independent accountants for 1999. Set forth below is the
         number of votes cast for, against or withheld, as well as the number of
         abstentions and Broker non-votes as to each such matter, including a
         separate tabulation with respect to each nominee for director:

         Proposal #1 - To fix the number of directors at seven and to elect a
         Board of Directors for the ensuing year.

<TABLE>
<CAPTION>
                                                                        BROKER
                               FOR              WITHHELD    ABSTAIN    NON-VOTES
<S>                           <C>              <C>         <C>        <C>
         John F. Keane         63,389,204       359,386         0          0
         Brian T. Keane        63,384,230       364,360         0          0
         John F. Keane, Jr.    63,380,692       367,898         0          0
         John F. Rockhart      63,482,979       265,611         0          0
         Robert Shafto         63,492,312       256,278         0          0
         Winston Hindle        63,462,050       286,540         0          0
         Philip Harkins        63,386,846       361,744         0          0
</TABLE>

         Proposal #2 - To ratify and approve the selection by the Board of
         Directors of Ernst & Young LLP as the Company's independent accountants
         for the current year.

<TABLE>
<CAPTION>
                                                                        BROKER
                               FOR              AGAINST     ABSTAIN    NON-VOTES
<S>                           <C>              <C>         <C>        <C>
                               63,560,391       127,608     60,591        0
</TABLE>

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits  None.

         (b)  Reports on Form 8-K. The Company filed the following current
              Reports on Form 8-K during the three month period ended June 30,
              1999.

              Current Report on Form 8-K dated April 6, 1999 announcing a change
              in accountants from PricewaterhouseCoopers LLP to Ernst & Young
              LLP

              Current Report on Form 8-K dated June 30, 1999, announcing
              earnings for fiscal quarter ended June 30, 1999

              Current Report on Form 8-K dated May 29, 1999, as amended
              regarding share repurchase program

                                       16
<PAGE>

                                 SIGNATURES
--------------------------------------------------------------------------------

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

                                         KEANE, INC.
                                         (Registrant)


Date       August 10, 1999                 /s/ John F. Keane
     --------------------------    -----------------------------------
                                           John F. Keane
                                           President


Date       August 10, 1999                 /s/ Wallace A. Cataldo
     --------------------------    -----------------------------------
                                           Wallace A. Cataldo
                                           Vice President, Finance

                                       17