<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(MARK ONE)

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


                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999

                                       OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
For the transition period from _____ to _____

                         COMMISSION FILE NUMBER 0-22718

                                ZAMBA CORPORATION
             (Exact name of Registrant as specified in its charter)

           DELAWARE                                     #41-1636021
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

             7301 OHMS LANE, SUITE 200, MINNEAPOLIS, MINNESOTA 55439
          (Address of principal executive offices, including zip code)

                                 (612) 832-9800
              (Registrant's telephone number, including area code)

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
                                                     Outstanding at
               Class                                 June 30, 1999
               -----                                 --------------
    <S>                                              <C>
    Common Stock, $0.01 par value                      29,605,320
</TABLE>

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--------------------------------------------------------------------------------

THIS REPORT CONSISTS OF 40 SEQUENTIALLY NUMBERED PAGES.

<PAGE>

                                ZAMBA CORPORATION

                                      INDEX

                         PART I -- Financial Information
<TABLE>
<CAPTION>
Item 1.    Financial Statements (Unaudited)                             Page No.
                                                                        --------
<S>                                                                     <C>
              Consolidated Statements of Operations for the
                 Three 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

              Consolidated Notes to Financial Statements                   6

Item 2.    Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                    7

Item 3.    Not Applicable

                       PART II -- Other Information

Items
1-3.       None                                                           13

Item 4.    Submission of Matters to a Vote of Security Holders            13

Item 5.    None                                                           13

Item 6.    Exhibits and Reports on Form 8-K                               13

Signatures                                                                14
</TABLE>

                                       2

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS

                                     ZAMBA CORPORATION
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                       (UNAUDITED)

<TABLE>
<CAPTION>
(In thousands, except per share data)
                                                 Three Months Ended        Six Months Ended
                                                      June 30,                 June 30,
                                                 -------------------      --------------------
                                                   1999        1998         1999          1998
                                                 -------     -------      -------        ------
<S>                                              <C>         <C>          <C>            <C>
Net revenues:
 Services                                         $6,327      $1,385      $11,100        $2,719
 Products                                              4          25           54            95
                                                 -------     -------      -------        ------
                                                   6,331       1,410       11,154         2,814
Cost and expenses:
 Project costs                                     3,348         431        6,133           931
 Other costs                                         740         151        1,334           314
 Sales and marketing                                 500         492        1,023           970
 General and administrative                        1,536         454        2,560           905
 Research and development                              -         427            -           811
 Amortization of intangibles                         944           -        1,880             -
                                                 -------     -------      -------        ------

Loss from operations                                (737)       (545)      (1,776)       (1,117)

Other income (expense):
Interest income                                       19          56           42           132
Interest expense                                     (21)          -          (45)            -
                                                 -------     -------      -------        ------
                                                      (2)         56           (3)          132

Net loss                                           ($739)      ($489)     ($1,779)        ($985)
                                                 -------     -------      -------        ------
                                                 -------     -------      -------        ------

Net loss per share- basic and diluted             ($0.02)     ($0.02)      ($0.06)       ($0.04)
                                                 -------     -------      -------        ------
                                                 -------     -------      -------        ------

Weighted average shares outstanding               29,576      24,923       29,321        25,025
                                                 -------     -------      -------        ------
                                                 -------     -------      -------        ------
</TABLE>

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

                                       3
<PAGE>

                                 ZAMBA CORPORATION
                            CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

                                        ASSETS

<TABLE>
<CAPTION>
                                                                          June 30,    December 31,
                                                                            1999          1998
                                                                         --------     -----------
<S>                                                                      <C>          <C>
Current assets:
 Cash and cash equivalents                                               $  4,511      $  2,962
 Accounts receivable, net                                                   4,020         2,150
 Unbilled receivables                                                         361           284
 Prepaid expenses and other current assets                                    202           299
                                                                         --------     ---------
             Total current assets                                           9,094         5,695

Property and equipment, net                                                 1,186         1,175
Restricted cash                                                               200           200
Identifiable intangible assets, net                                         4,906         6,768
Goodwill, net                                                                  96            38
Other assets                                                                   62            65
                                                                         --------     ---------
                 Total assets                                            $ 15,544     $  13,941
                                                                         --------     ---------
                                                                         --------     ---------

                LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
 Current installments of long-term debt                                      $228          $285
 Accounts payable                                                             816           195
 Accrued expenses                                                           1,712           765
 Deferred revenue                                                           2,124           334
                                                                         --------     ---------
             Total current liabilities                                      4,880         1,579
                                                                         --------     ---------

 Long-term debt, less current installments                                  1,119         1,240
                                                                         --------     ---------

Commitments

             Total liabilities                                              5,999         2,819
                                                                         --------     ---------

Stockholders' equity:
 Common stock, $0.01 par value, 55,000 shares
   authorized, 29,605 and 29,014 issued and
   outstanding at June 30, 1999 and December 31, 1998,
   respectively                                                               296           290
 Additional paid-in capital                                                78,863        78,667
 Accumulated deficit                                                      (69,614)      (67,835)
                                                                         --------     ---------
             Total stockholders' equity                                     9,545        11,122
                                                                         --------     ---------
          Total liabilities and stockholders' equity                     $ 15,544     $  13,941
                                                                         --------     ---------
                                                                         --------     ---------
</TABLE>

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

                                       4
<PAGE>

                                ZAMBA CORPORATION
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
(In thousands)                                                             Six Months Ended
                                                                               June 30,
                                                                         ----------------------
                                                                            1999        1998
                                                                         ---------    ---------
<S>                                                                      <C>          <C>
Cash flows from operating activities:
 Net loss                                                                 ($1,779)        ($985)
 Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:
   Depreciation and amortization                                            2,242           245
   Provision for bad debts                                                    132             -
   Amortization of discounts on investments                                     -            (7)
   Changes in operating assets and liabilities:
     Accounts receivable                                                   (2,002)         (117)
     Unbilled receivables                                                     (77)            -
     Prepaid expenses and other current assets                                 93            78
     Accounts payable                                                         620            75
     Accrued expenses                                                         948          (357)
     Deferred revenue                                                       1,790          (209)
                                                                         ---------    ---------
          Net cash provided by (used in) operating activities                1,967        (1,277)

Cash flows from investing activities:
 Purchase of investments                                                        -        (2,327)
 Proceeds from maturity of investments                                          -         3,565
 Purchase of equipment                                                       (368)          (28)
 Payment on debt                                                              (74)            -
 Other                                                                        (70)          (25)
                                                                         ---------    ---------
          Net cash provided by (used in) investing activities                (512)        1,185

Cash flows from financing activities:
 Proceeds from exercises of stock options and warrants                         94           134
                                                                         ---------    ---------
          Net cash provided by financing activities                            94           134
                                                                         ---------    ---------
Net change in cash and cash equivalents                                     1,549            42
Cash and cash equivalents, beginning of period                              2,962         3,103
                                                                         ---------    ---------
Cash and cash equivalents, end of period                                   $4,511        $3,145
                                                                         ---------    ---------
                                                                         ---------    ---------
</TABLE>

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

                                        5
<PAGE>

                                ZAMBA CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)

Note A.  Basis of Presentation:

The unaudited consolidated financial statements of Zamba Corporation ("Zamba"
or the "Company") as of June 30, 1999, and for the three and six month
periods ended June 30, 1999, and 1998, reflect, in the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary
to fairly state our financial position as of June 30, 1999, and our results
of operations and cash flows for the reported periods. The results of
operations for any interim period are not necessarily indicative of the
results to be expected for any other interim period or for the full year. The
year-end balance sheet data was derived from audited financial statements,
but does not include all disclosures required by generally accepted
accounting principles. These financial statements should be read in
conjunction with our audited consolidated financial statements and related
notes for the year ended December 31, 1998, which were included in our 1998
Annual Report on Form 10-K.

Note B. Net Loss per Share:

We incurred net losses for the three and six month periods ended June 30,
1999, and 1998, and excluded assumed conversion shares from the diluted loss
per share computation, because their effect is anti-dilutive. At June 30,
1999, we had 7,280,205 stock options outstanding, which may be dilutive in
future periods.

Note C.  Selected Balance Sheet Information:

<TABLE>
<CAPTION>

(in thousands)                              June 30, 1999            December 31, 1998
                                            -------------            -----------------
                                             (Unaudited)
<S>                                         <C>                      <C>
Accounts receivable, net:
     Accounts receivable                       $   4,324                  $   2,377
     Less allowance for doubtful accounts           (304)                      (227)
                                               ---------                  ---------
                                               $   4,020                  $   2,150
                                               ---------                  ---------
                                               ---------                  ---------

Property and equipment, net:
     Computer equipment                        $   2,690                  $   2,462
     Furniture and equipment                         649                        507
     Leasehold improvements                          186                        186
                                               ---------                  ---------
                                                   3,525                      3,155
     Less accumulated depreciation and
          amortization                            (2,339)                    (1,980)
                                               ---------                   --------
                                               $   1,186                  $   1,175
                                               ---------                  ---------
                                               ---------                  ---------
</TABLE>

                                       6

<PAGE>

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

OVERVIEW

Zamba is a national customer care consulting company. According to the
Gartner Group, customer care is expected to grow at a cumulative average
growth rate of 54% per year through 2002. Our services are designed to assist
clients in building lasting relationships with customers, increase the
effectiveness of customer service and sales operations, and improve overall
communication with customers. We deliver our services using a unique
combination of accumulated expertise in the customer care field, existing
technology, and client knowledge. Typically, we perform our services on a
fixed-bid, fixed-timetable basis. Rapid development and significant client
involvement are key aspects to our methodologies. We offer our clients
end-to-end assistance with their implementations, including business case
evaluation, system planning and design, software implementation, modification
and development, training, installation, change management, network
management, and post-implementation support. Our services include the design,
implementation and integration of enterprise level applications to facilitate
sales automation, call center management, marketing automation and automated
field service and sales. We also own approximately 44% of the equity in
NextNet, Inc., a private corporation engaged in the development of wireless
data products. The chairman of Zamba, Joseph B. Costello, is also the
chairman of NextNet.

We currently derive most of our revenue from systems integration services
including business case evaluation, system planning and design, software
package implementation, custom software development, training, installation
and change management. We also derive recurring revenue from providing
post-implementation support.

Our revenues and earnings may fluctuate from quarter to quarter based on the
number, size and scope of projects in which we are engaged, the contractual
terms and degree of completion of such projects, any delays incurred in
connection with a project, employee utilization rates, the adequacy of
provisions for losses, the accuracy of estimates of resources required to
complete ongoing projects, and general economic conditions and other factors.
Also, revenues from a large client may constitute a significant portion of
our total revenues in any particular quarter.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1999, COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1998

     Revenues increased 349% to $6.33 million in 1999 compared to $1.41
million in 1998. The increase in revenues is due to Zamba's acquisition of
The QuickSilver Group ("QuickSilver") in September 1998 and growth in the
combined business since the acquisition. The increase in service revenue is
primarily due to our transition to the sale of system integration services,
the QuickSilver acquisition, and increased market acceptance of our services.
The decrease in product revenue is due to our transition away from selling
stand-alone software

                                       7

<PAGE>

products. We expect services revenues to increase throughout 1999 while
product revenues should continue to decline.

     Project costs consist primarily of salaries and employee benefits for
personnel dedicated to client projects and direct expenses incurred to
complete projects that were not reimbursed by the client. These costs
represent the most significant expense Zamba incurs in providing its
services. Project costs were $3.35 million or 53% of net revenues in 1999
compared to $431,000 or 31% in 1998. The increase was primarily due to the
increase in project personnel. Project personnel increased as a result of the
acquisition of QuickSilver, our change in focus from software to services,
and the increased number and size of our engagements. We expect project
personnel costs to continue to increase on a dollar basis throughout 1999 in
order to deliver revenue growth from customer care services.

     Other costs consist of non-billable project personnel costs and other
business costs, including training and recruiting costs. Other costs were
$740,000 or 12% of net revenues in 1999 compared to $151,000 or 11% of net
revenues in 1998. The increase in other costs relates primarily to the
increase in headcount for both training and recruiting personnel.

     Sales and marketing expenses were $500,000 or 8% of net revenues in 1999
compared to $492,000 or 35% of net revenues in 1998. The increase in dollar
terms is due to the hiring of additional direct sales personnel. The decrease
in percentage terms is due to our increased revenue and our success in the
marketplace. We expect the amount spent for sales and marketing costs will
increase slightly over the next few quarters as we grow our staff and pay
commissions for the expected increase in sales.

     General and administrative expenses were $1.54 million or 24% of net
revenues in 1999 compared to $454,000 or 32% of net revenues in 1998. The
increase in dollar terms is primarily due to the acquisition of QuickSilver
and the related increase in staff headcount as well as increased facilities
and depreciation expenses. The decrease in percentage terms mostly reflects
our increased revenues. We anticipate general and administrative costs to
increase on a dollar basis over the next several quarters as we continue to
expand geographically and invest in developing a technology infrastructure to
support our anticipated revenue and headcount growth.

     No research and development expenses were incurred in 1999 compared to
$427,000 in 1998. The 1998 expenses represent costs we incurred to develop
NextNet before completing the outside financing for NextNet on September 21,
1998, as discussed in our Form 10-K for the year ended December 31, 1998. We
do not expect to incur any research and development costs for the foreseeable
future.

     Intangible asset amortization expense was $944,000 in 1999 compared to
$0 in 1998. This increase is due to the acquisition of QuickSilver. The
acquisition was accounted for using the purchase method of accounting and the
purchase price was allocated to tangible and identifiable intangible assets.
The fair value of identifiable intangible assets was $7.70 million and was
allocated to the following categories: people and experiences, client
references, client lists, and intellectual property and delivery methodology.
These amounts are being amortized over economic useful lives of between two
and four years. Approximately 97% of the costs related to the QuickSilver
acquisition will be amortized by September 30, 2000.


                                      8

<PAGE>

     Interest income was $19,000 in 1999 compared to $56,000 in 1998. The
decrease is due to decreases in our cash and investment accounts, which were
used to fund operating activities and the QuickSilver acquisition.

     Interest expense was $21,000 in 1999 compared to $0 in 1998. The
increase is due to interest charges paid on debt acquired as result of the
acquisition of QuickSilver and interest charges accrued for future payments
of the notes payable issued in connection with the acquisition of QuickSilver.

SIX MONTHS ENDED JUNE 30, 1999, COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1998

     Revenues increased 296% to $11.15 million in 1999 compared to $2.81
million in 1998. The increase in revenues is due to the acquisition of
QuickSilver in September 1998 and growth in the combined business since the
acquisition. The increase in service revenue is primarily due to our
transition to the sale of system integration services, the QuickSilver
acquisition, and increased market acceptance of our services. The decrease in
product revenue is due to our transition away from selling stand-alone
software products. We expect services revenues to increase throughout 1999
while product revenues should continue to decline.

     Project costs consist primarily of salaries and employee benefits for
personnel dedicated to client projects and direct expenses incurred to
complete projects that were not reimbursed by the client. These costs
represent the most significant expense Zamba incurs in providing its
services. Project costs were $6.13 million or 55% of net revenues in 1999
compared to $931,000 or 33% in 1998. The increase in costs is primarily due
to the increase in project personnel. Project personnel increased as a result
of the acquisition of QuickSilver, our change in focus from software to
services, and the increased number and size of our engagements. We expect
project personnel costs to continue to increase on a dollar basis throughout
1999 in order to deliver revenue growth.

     Other costs consist of non-billable project personnel costs and other
business costs, including training and recruiting costs. Other costs were
$1.33 million or 12% of net revenues in 1999 compared to $314,000 or 11% of
net revenues in 1998. The increase in other costs relates primarily to the
increase in headcount for both training and recruiting personnel.

     Sales and marketing expenses were $1.02 million or 9% of net revenues in
1999 compared to $970,000 or 34% of net revenues in 1998. The increase in
dollar terms is due to the hiring of additional direct sales personnel. The
decrease in percentage terms is due to our increased revenue and success in
the marketplace. We expect the amount spent for sales and marketing costs
will increase slightly over the next few quarters as we grow our staff and
pay commissions for the expected increase in sales.

     General and administrative expenses were $2.56 million or 23% of net
revenues in 1999 compared to $905,000 or 32% of net revenues in 1998. The
increase in dollar terms is primarily due to the acquisition of QuickSilver and
the related increase in staff headcount as well as increased expenses for
facilities and depreciation. The decrease in percentage terms mostly reflects
our increased revenues. We anticipate general and administrative costs to
increase on a

                                     9

<PAGE>

dollar basis over the next several quarters as we increase the size of our
offices or open offices in additional locations, and invest in developing our
technology infrastructure.

     No research and development expenses were incurred in 1999 compared to
$811,000 in 1998. The 1998 expenses represent costs we incurred to develop
NextNet before completing the outside financing for NextNet on September 21,
1998, as discussed in our Form 10-K for the year ended December 31, 1998. We
do not expect to incur any research and development costs for the foreseeable
future.

     Intangible asset amortization expense was $1.88 million in 1999 compared
to $0 in 1998. This increase is due to the acquisition of QuickSilver. The
acquisition was accounted for using the purchase method of accounting and the
purchase price was allocated to tangible and identifiable intangible assets.
The fair value of identifiable intangible assets was $7.70 million and was
allocated to the following categories: people and experiences, client
references, client lists, and intellectual property and delivery methodology.
These amounts are being amortized over economic useful lives of between two
and four years. Approximately 97% of the costs related to the QuickSilver
acquisition will be amortized by September 30, 2000.

     Interest income was $42,000 in 1999 compared to $132,000 in 1998. The
decrease is due to decreases in our cash and investment accounts, which were
used to fund operating activities and the QuickSilver acquisition.

     Interest expense was $45,000 in 1999 compared to $0 in 1998. The
increase is due to interest charges paid on debt acquired as result of the
acquisition of QuickSilver and interest charges accrued for future payments
of the notes payable issued in connection with the acquisition of QuickSilver.

LIQUIDITY AND CAPITAL RESOURCES

     As of June 30, 1999, we had no significant capital spending or purchase
commitments and had cash and cash equivalents totaling $4.51 million and
working capital of $4.21 million. For the six months ended June 30, 1999,
$1.97 million was provided from operating activities compared to the $1.28
million used in operating activities in the same period in 1998. The increase
in cash provided from operating activities is due to our improved operating
performance and a more focused effort on cash management. During the six
months ended June 30, 1999, we used $512,000 in investing activities. We
believe our existing capital resources will be sufficient to meet our capital
requirements into 2000.

YEAR 2000

Year 2000 computer issues may impact Zamba. The full extent and scope of the
risks from the Year 2000 issue have not yet been fully assessed. In the event
that internal products and systems, or those products and systems provided or
utilized by third parties do not correctly recognize and process date
information beyond the year 1999, material adverse effects on our business,
operating results, and financial condition could result.


                                     10

<PAGE>

To address Year 2000 issues, we have initiated a program designed to address the
most critical Year 2000 items that would affect our products and the operations
of the following functions: operations, finance, sales, and human resources. We
have not commenced work on contingency plans to address potential problems with
its internal systems or the systems of its supplier and customers or other third
parties.

In December 1998, we commenced a program to inventory, assess, remediate, and
test the Year 2000 capability of our software products. All Year 2000
activities concerning current and legacy products are expected to be
completed by October 1999.

Other Year 2000 issues primarily consist of assessing the Year 2000 impact
for outside vendors, customers, and facilities. Project plans are being
developed and will include the process of identifying and prioritizing
critical suppliers and customers at the direct interface level, and
communicating with them about their plans and progress in addressing Year
2000 issues. Evaluations of the most critical third parties have been
initiated. It is expected that all Year 2000 project plans, 1999 budgets and
the remaining inventories will be completed by the beginning of the third
quarter of 1999. Concurrent with this effort, each business function is
conducting a focused level of ranking and functional assessment of its
inventory to establish the methods and actions required to resolve any Year
2000 issues discovered. The assessment efforts are estimated to be completed
by the beginning of the third quarter of 1999. The remediation (modification
or replacement of existing software or systems) and the testing phases of the
project plans are expected to take place throughout most of 1999 and are
estimated to be completed, for all business critical items, by the fourth
quarter of 1999. All remaining issues (which are considered low priority or
low risk to the business) are planned to be addressed as time permits and
could continue through the first half of 2000.

To date, nominal amounts have been spent to address Year 2000 issues, aside
from amounts spent in the normal course of business to upgrade our
information system infrastructure. We don't expect the total cost associated
with required modifications to become Year 2000 ready to be significant or to
have a material adverse effect on our business, operating results and
financial condition. Our current estimates of the amount of time and costs
necessary to implement and test its systems are based on the facts and
circumstances existing at this time. New developments may occur that could
affect our estimates for the required modifications to become Year 2000
ready. These developments include, but are not limited to: (a) the
availability and cost of personnel trained in this area, (b) the ability to
locate and correct all relevant computer code and equipment, and (c) the
planning and modification success needed to achieve full implementation.

Readers are cautioned that the foregoing discussion regarding Year 2000
computer issues contains forward-looking statements based on current
expectations that involve risks and uncertainties and should be considered in
conjunction with the following. The failure to correct a material Year 2000
problem could result in an interruption in, or a failure of, certain normal
business activities or operations. Such failures could materially and
adversely affect our business, operating results, and financial condition.
Due in large part to the uncertainty of the Year 2000 readiness of
third-party suppliers and customers, as well as the lack of a final Year 2000
project plan for the remaining internal business systems that are not yet
assessed as Year 2000 ready, we are currently unable to determine whether the
consequences of Year 2000 issues will have a material impact on our business,
operating results or financial condition. Our programs addressing Year 2000
computer issues are expected to reduce our level of uncertainty

                                      11

<PAGE>

regarding Year 2000 issues and, in particular, about the Year 2000 readiness
of its material internal operations, suppliers, customers, and other
third-parties. In addition, we believe that the current Year 2000 activities
surrounding our software products and internal systems have reduced the risk
of any disruption caused by any Year 2000 issues in these areas.

NEW ACCOUNTING STANDARDS

     Statement of Financial Accounting Standard No. 133 "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133), effective in
2001, establishes new standards for recognizing all derivatives as either
assets or liabilities, and measuring those instruments at fair value. We have
no derivative financial instruments. At the present time, we do not
anticipate that SFAS No. 133 will have a material impact on the financial
position or results of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We have debt at a fixed interest rate of 7%, as described in Item 7A in
the 1998 Annual Report to Shareholders on Form 10-K. There has been no
material change to this information.

FACTORS THAT MAY AFFECT FUTURE RESULTS

There can be no assurance that our business will grow as anticipated or that
we will achieve or sustain profitability on a quarterly or annual basis in
the future. We derive a substantial part of our revenues from a small number
of clients whom, after evaluating our capabilities, decide whether to engage
us to create business case evaluations, consult on change management
practices and, in some cases, to design, implement and deploy their customer
care systems. A decision by any one of these clients to delay a customer care
project may have a material adverse effect on our business and results of
operations.

In order for our revenues from consulting and integration services to grow,
we must continue to add more clients and larger projects to plan, design and
implement customer care systems. Inability to obtain clients for large-scale
consulting and integration services could materially and adversely affect the
growth of its business.

In addition to the factors listed above, actual results could vary materially
from the foregoing forward-looking statements due to our inability to hire
and retain qualified personnel, the risk that we may need to enhance products
and services beyond what is currently planned, the levels of promotion and
marketing required to promote our products and services so as to attain a
competitive position in the marketplace, or other risks and uncertainties
identified in this Quarterly Report and our other filings with the SEC.

                                      12

<PAGE>

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
         None

ITEM 2.  CHANGES IN SECURITIES.
         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.
         None

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

     Zamba held its Annual Meeting on May 20, 1999. Two proposals were
presented at the Annual Meeting for voting by the shareholders: the election
of directors and the ratification of KPMG, LLP as Zamba's independent
auditors for 1999. Each person nominated for director was elected, with
25,531,433 votes cast in favor of electing Joseph B. Costello, and 56,206
votes cast against; 25,531,433 votes cast in favor of electing Dixon R. Doll,
and 56,206 votes cast against; 25,533,432 votes cast in favor of electing
Paul D. Edelhertz, and 54,207 votes cast against; 25,430,821 votes cast in
favor of electing Michael A. Fabiaschi, and 156,818 votes cast against; and
25,533,433 votes cast in favor of electing Thomas W. Minick, and 54,206 votes
cast against. 25,512,276 votes were cast in favor of the proposal to ratify
the appointment of KPMG, LLP as independent auditors for fiscal year 1999;
with 6,749 votes cast against; 68,614 votes abstaining; and no broker
non-votes.

ITEM 5.  OTHER INFORMATION
         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

(b)      Reports on Form 8-K - None


                                      13

<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.


                                       ZAMBA CORPORATION

                                      By:  /s/ PAUL EDELHERTZ
                                               ---------------------------------
                                           Paul Edelhertz
                                           President and Chief Executive Officer


                                      By:  /s/ MICHAEL H. CARREL
                                               ---------------------------------
                                           Michael H. Carrel
                                           Chief Financial Officer


                             Dated: August 16, 1999



                                       14

<PAGE>

                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
                                                               SEQUENTIALLY NUMBERED
  EXHIBIT NUMBER             TITLE                                      PAGE
-------------------------------------------------------------------------------------
<S>                    <C>                                     <C>
10.01**                Change of Control Agreement between
                       Registrant and Peter Marton dated                 16
                       July 15, 1999
-------------------------------------------------------------------------------------
10.02**                Change of Control Agreement between
                       Registrant and Michael Carrel dated               25
                       July 8, 1999
-------------------------------------------------------------------------------------
10.03**                Change of Control Agreement between
                       Registrant and Ian Nemerov dated July 8,          33
                       1999
-------------------------------------------------------------------------------------
</TABLE>
** Management contract or compensation plan


                                        15