Wayne Wedell
                                                              1342 Sunny Dale Ct
                                                              Hubertus, WI 53033
December 18, 1997

Mike Dunham
President & CEO
Effective Management Systems,  Inc.
12000 West Park Place
Milwaukee, WI 53224


Dear Mike,

         This  letter   constitutes  an  Employment  and  Separation   Agreement
("Agreement")   between  myself,  Wayne  Wedell   ("Employee"),   and  Effective
Management  Systems,  Inc.  ("EMS").  It is effective as of January 1, 1998 (the
Effective Date).  This Agreement  recognizes my contributions,  dedication,  and
dependability to EMS, including:

Over  sixteen  years  of  management,  leadership,  technical,   administrative,
consulting  and/or other  expertise which is and has been beneficial to EMS; and
consistent  high  performance  in the areas of revenue  and  margin  generation,
attracting and  developing  top employees to EMS, and  consistent  high customer
satisfaction.

Both parties to this Agreement recognize that it is in the best interests of EMS
that the  Employee  continues  to be employed by EMS,  and EMS desires to employ
Employee and Employee desires to be employed by EMS.

In consideration of the mutual covenants  contained herein, the parties agree to
the following:

1. Employment. EMS hereby employs Employee and Employee hereby accepts continued
employment  with EMS. The Term of this  Agreement  shall run from the  Effective
Date until the Separation  Date. The Separation  Date shall be this  Agreement's
termination date. This Agreement will terminate December 31, 2006 after a period
of eight (8) years from the date of this Agreement unless earlier  terminated or
extended  pursuant  to the terms and  conditions  of this  Agreement.  Except as
specifically   set  forth  below  for   certain   specified   early   separation
circumstances,  all benefits and  compensation  will cease as of the  Separation
Date.

2. Duties.  During the Term,  Employee shall be a  Vice-President,  or any other
position  which,  overall,  is of  reasonably  equal or  higher  responsibility.
Employee shall devote his skills,  labor and attention to the performance of his
duties under this Agreement. Employee shall perform such duties as are requested
and assigned to him by the President, or other duly authorized employee of EMS.

3. Salary  Compensation.  Employee shall be paid an initial salary in the amount
of Ninety Thousand  Dollars  ($90,000.00) per year commencing with the Effective
Date,  payable at the regular pay periods of EMS subject to required and elected
deductions.   Employee's  annual  salary  for  each  subsequent  year  shall  be
established by the Compensation  Committee of EMS, but shall be no less than the
prior years' salary plus an annual  increase  from the prior year  equivalent to
the Bureau of Labor  Statistics'  CPI cost of living  change for the prior year,
except in a year where there is a salary freeze or salary  reduction  applicable
to EMS  employees  of his  position  level,  in which case his then current base
salary shall be proportionally impacted as per such others.



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4. Bonus  Compensation.  In  addition  to the salary set forth in  Paragraph  3,
Employee shall be eligible for an annual bonus, based on Employee's performance,
at the discretion of the EMS' Compensation Committee.

5. Vacation  Benefit.  Employee  shall be entitled to vacation and personal days
each year  pursuant to the terms of EMS'  Employee  Handbook  applicable  to all
other  employees of his position level and length of  employment.  In any event,
Employee  shall be  entitled to no less than three  weeks of paid  vacation  per
calendar year.

6. Other  Benefits.  Employee shall be entitled to receive all other benefits as
made  available from time to time to employees of his position level at EMS such
as  sick  pay,  holiday  pay,  heath  insurance,  disability  insurance,  dental
insurance, life insurance, and company matching 401k.

7. Automobile Expense Benefit. Employee shall have use of an automobile owned by
EMS at  EMS'  expense,  which  automobile  shall  be  equipped  with a  cellular
telephone for use by Employee.

8. Business Expense Reimbursement.  As and to the extent made available to other
employees of his position level, Employee shall be reimbursed for all reasonable
and  necessary  business  expenses  incurred by Employee in the  performance  of
Employee's duties for EMS such as sales expense,  travel expense,  business home
phone, and  entertainment  expenses.  Similarly,  Employee shall be permitted to
utilize  an EMS  credit  card to  incur  such  expenses  in the  performance  of
Employees duties for EMS.

9. Private Office. As and to the extent made available to other employees of his
position level, Employee shall have full and complete use of a private office at
the EMS facility located in the greater Milwaukee area.

10.  Limitation  on Business  Travel.  EMS agrees that the  Employee's  business
travel  overnight  away from the office  shall be limited to no more than 25% of
all business working days in any given calendar year.

11.  Option to Renew.  Employee  and EMS shall  have the  option to extend  this
Agreement  for  addition   periods  of  five  (5)  years.   This  contract  will
automatically extend its Term for additional five (5) year periods unless either
Employee or EMS gives written  notice of  non-renewal  to the other at least one
hundred  fifty  (150) days in advance of the full Term  expiration  date of this
Agreement.

12.  Termination of the Agreement

         A. EMS may terminate  Employee's  employment  upon thirty (30) calendar
days written notice during the term of this Agreement, subject to the provisions
of paragraph 13 herein.

         B. In the event that Employee is  terminated  subsequent to a Change in
Control, Employee shall be entitled to receive all of the payments and enjoy all
the benefits specified in paragraph 13 herein.

         C. In the event that Employee should determine, in good faith and after
reasonable  effort in  performing  such duties as are  requested and assigned to
him,  that  his  status  or  responsibilities  with  EMS has or have  diminished
subsequent  to a Change in Control,  and shall for that reason,  resign from his
employment with EMS within one year after such Change in Control, Employee shall
be entitled to receive all the payments and enjoy all the benefits  specified in
paragraph 13 herein.  A "Change in Control"  shall mean the  acquisition  by any
corporation  or  group  of  associated  persons  acting  in  concert,  excluding
affiliates,  if any, of EMS as of the date hereof,  of an aggregate of more than
25% of the outstanding shares of voting stock of EMS coupled with or followed by
the election as  directors of EMS of persons who were not  directors at the time
of such  acquisition  of such  persons  shall  become  a  majority  of  Board of
Directors of EMS.



<PAGE>



         D. Employee may terminate his employment upon ninety (90) calendar days
written notice during the term of this Agreement without recourse by EMS against
Employee.

13. Additional Consideration. Any termination pursuant to Paragraph 12A, 12B, or
12C shall obligate EMS to pay Employee for the following:

         A.  Employee will receive an amount equal to seventy five percent (75%)
of his highest  annual base salary since the start of this  Agreement to be paid
or payable by EMS to Employee  through a lump sum payment of twenty five percent
(25%) of that amount payable within 30 days after termination of this Agreement,
and the balance of said amount  shall be paid in bimonthly  payments  over a one
(1) year  period.  Payments  will stop if Employee  has  obtained an  acceptable
equivalent position in the Milwaukee area.

         B. EMS will also provide, at no cost to Employee,  equivalent insurance
benefits and use of company  automobile for a period of one year starting at the
termination  date.  Provisions  by EMS to pay Employee for these  insurance  and
automobile benefits will stop if Employee has obtained an acceptable  equivalent
position in the Milwaukee area.

14.  Notices.  Any notices desired or required under the terms of this Agreement
shall be in writing  and shall be deemed  served  when  deposited  with  postage
prepaid,  certified  mail, in the United  States mail address to the  respective
parties  hereto at the  addresses  designated  by each party.  Either  party may
notify the other party that such party's address has changed for notice purposes
and in such case shall be sent by the other to such new address.

15. Assignment. This Agreement may not be assigned buy either party.

16.  Governing Law. This Agreement  shall be interpreted in the courts and under
the laws of the State of Wisconsin.  If any portion of this Agreement is held to
be invalid under  applicable  law, only that portion of such law has application
and the remaining portions shall remain in full force and effect.

17. Complete and Binding  Agreement.  The parties understand and agree that this
Agreement  is final and complete  with respect to the matters set forth  herein,
and may not be  amended  except in  writing  referencing  this  Agreement.  This
Agreement binds the parties hereto,  and their respective heirs,  successors and
representatives.

18. Cost / Attorney's  Fees. If EMS is proven to have violated this Agreement in
any manner,  upon such findings by a court of competent  jurisdiction,  it shall
pay Employee the reasonable  attorney's fees and costs incurred to pursue action
defending such breach.

19. In Exchange.  In exchange for the consideration set forth herein and subject
to the faithful  performance of the terms herein by EMS,  Employee  specifically
agrees to the following:

         A. Return of EMS Property.  Employee  agrees to return any EMS property
in his possession by the Separation Date except as set forth above.

         B. Confidentiality.  Employee is under a Confidentiality agreement with
EMS and agrees to abide by the terms of that agreement.

         C. No Denigration.  Employee agrees that he will not at any time in the
future make any  statements  to former,  current,  or  prospective  customers or
employees  of EMS or the media or to  anyone in the  industry  or  community  in
general  which could be  construed  by a  reasonable  person as being in any way
derogatory or negative about EMS.

         D.  Confidentiality  of Agreement.  Employee agrees that this Agreement
and its terms are strictly  confidential and shall not be divulged to any person
other  than  to  his  legal  counsel  and   accountant,   but  subject  to  this
confidentiality provision, solely for purposes of advice.


<PAGE>



20. Voluntary Act and Revocation. Employee acknowledges that he has been given a
copy of this Agreement  with a period of twenty-one  days to review and consider
it before signing it, and an  opportunity  to consult with an attorney,  that he
has carefully read the entire  document and  understands  its provisions and has
signed it as his free act and deed.  Employee may revoke this  Agreement  within
seven days of signing by written notice  delivered to Mike Dunham,  President of
EMS, at its Milwaukee office.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of December 31, 1997.

Wayne Wedell, Employee                      Effective Management Systems, Inc.

By: /s/ Wayne Wedell                      By: /s/ Mike Dunham                  
       Wayne Wedell                                Mike Dunham, President & CEO