Exhibit 10.1

Employment, Confidentiality, Non-competition, and Severance Agreement
                                   (Agreement)

1.     Recitations  and Date.  This  Agreement  is entered  into by and  between
       Effective  Management  Systems,  Inc.  (EMS) and Michael D.  Dunham,  its
       President and Chief Executive  Officer  (Executive) as of the 19th day of
       March, 1999. It is entered into in recognition and acknowledgement of the
       significant,  crucial,  and continuing  beneficial and valuable  services
       being performed by Executive at the request of EMS.

2.     Employment.  EMS hereby agrees to employ Executive and Executive agree to
       continue his employment  with EMS. The term of this  Agreement  shall run
       from this date until the Separation Date as hereafter defined, unless the
       parties mutually agree otherwise (Term).

3.     Duties.  During the Term,  Executive shall continue to perform the duties
       of the  position  he now has,  as  reasonably  determined  by the  Board,
       consistent  with the level of  authority  and  responsibility  he now has
       (Duties).

4.     Compensation.  Executive's  base salary  shall not,  during the Term,  be
       reduced from its current level unless there is a corporate wide reduction
       applicable to all  executives of EMS, in which case his then current base
       salary  shall  be  proportionally   reduced  for  the  duration  of  such
       reduction.  Executive shall receive such bonuses and stock options as are
       determined by the Compensation Committee of the Board.

5.     Benefits.  Executive  shall  continue to receive  benefits  equivalent to
       those he presently receives,  including health, dental, life, disability,
       auto, and MAC  membership,  and such other benefits as are generally made
       available to employees and executives of EMS.

6.     Reaffirmation  of  Inventions  and  Non-disclosure  Agreement.  Executive
       acknowledges the ongoing  obligation he has to EMS to disclose and assign
       inventions as well as maintain the  confidentiality  of  proprietary  and
       sensitive  business  information  pursuant to the agreement  presently in
       effect  between the parties  dated  2/12/81,  a copy of which is attached
       hereto for reference purposes.

7.     No Prior  Agreements.  Except as set forth in  paragraph  6, the  parties
       acknowledge that this is the sole agreement  between them with respect to
       these subject matters and, to the extent any such prior agreements exist,
       whether verbal or written, they are hereby revoked.

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8.     Non-Solicitation  of  Employees.  For a period equal to the longer of one
       year from the Separation Date,  regardless of cause or initiating  party,
       or the length of the Severance  period  thereafter,  Executive shall not,
       directly or indirectly,  induce or attempt to induce any employee of EMS,
       including its presently  existing  Affiliates (at least 50% of the voting
       stock owned by EMS), to leave the employ of EMS.

9.     Non-competition  Period.  During  the Term of this  Agreement,  and for a
       period equal to the length of any Severance period thereafter,  Executive
       shall not  directly or  indirectly,  own any  interest in (other than not
       more than 5%  passive  stock  ownership  in a publicly  traded  company),
       participate  in,  consult  with,  or render any services for any business
       which is planning,  considering,  or does develop, market, or service ERP
       software anywhere in the world in the mid-market segment (businesses with
       up to $100 million in annual revenue).

10.    Separation  Date.  Separation  Date is the date  either  party  elects to
       terminate this Agreement.  the consequences of such termination depend on
       the party  initiating the  termination and the  circumstances  associated
       with such termination.

       a.     If  Executive  quits for a non Event reason or is  terminated  for
              Cause,  there  shall  be no  Severance  (each  term  as  hereafter
              defined)  and  Executive  shall  receive  only such  benefits  and
              compensation as any terminating employee would be entitled to such
              as accrued vacation pay and earned but not yet paid compensation.
       b.     If EMS terminates  Executive  without Cause at any time hereafter,
              Executive  shall be entitled to receive  Severance for a period of
              time depending on whether the  termination i) preceded a Change in
              Control, ii) followed an Asset Change in Control, or iii) followed
              a Shareholder Change in Control.  If circumstance i) applies,  the
              Severance period shall be 12 months,  if ii), the Severance period
              shall be 18 months,  and if iii), the Severance period shall be 15
              months.
       c.     If EMS  materially  changes  the Duties of  Executive  at any time
              after the date of this  Agreement (an Event),  Executive may elect
              to treat  such  action  as a  termination  under b) above  and the
              appropriate   Severance   shall   apply   depending   on   whether
              circumstance  i),  ii), or iii) is present,  except  that,  in the
              event of an Asset  Change in  Control,  the  consequent  change in
              authority and responsibility  solely resulting from such reduction
              in business  operations,  shall not be deemed an Event without the
              requisite Board change.

11.    Definitions.

       a.     Cause shall mean i) a final non-appealable felony conviction which
              substantially  impairs employee's ability to perform his duties or
              ii)  intentional  bad  faith  conduct  which  causes  demonstrable
              serious  financial  injury to EMS  evidenced  by a  binding  final
              judgement, order, or decree.
       b.     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


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              this date, of an aggregate of more than i) 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  and  such  persons  shall  become a
              majority of the Board  (Shareholder  Change in Control) or ii) 50%
              of the assets of EMS (as  reasonably  determined  by EMS' auditors
              according to generally acceptable  accounting  principles) coupled
              with the same director change as in i) (Asset Change in Control).
       c.     Severance  shall  mean  the  making  in  advance  of  payments  to
              Executive  (without  any  withholdings),  equivalent  to his gross
              monthly base salary  amount,  for 9 months with a lump sum payment
              of any remaining salary  equivalent  payments due for the duration
              of  Severance  at the 10th  month.  Severance  shall also  include
              continuation for the entire  Severance  period of health,  dental,
              group life,  and disability as then in effect but not less than in
              effect as of this date.  Severance shall also include,  regardless
              of  Severance  period  duration,  6 months  continuing  use of his
              company car, car phone,  lap top, company voice and email, and MAC
              membership  and six months  (6)  executive  outplacement  with R I
              Thompson or equivalent.  Severance  shall also effect an amendment
              to any  outstanding  option grants  immediately  accelerating  the
              vesting of all then  unvested  options and  extending  the time to
              exercise all vested options to 12 months from such date.

12.    Legal  Interpretation.  If any provision of this Agreement is found to be
       in conflict with  provisions of any  applicable  law, the parties  desire
       that such  conflict not  invalidate  the entire  Agreement and that it be
       construed  to  invalidate  only the  conflicting  provisions  and,  where
       possible,  to reduce the duration or scope of a conflicting  provision to
       the maximum  permitted by law.  This  Agreement  shall be governed by the
       laws of the State of Wisconsin without giving effect to any choice of law
       or conflict of law rules or provisions.

13.    Other  Terms.  Both  parties  agree that any public  announcement  of any
       separation,  except for Cause,  shall require their mutual  consent as to
       the content, subject only to SEC or equivalent requirements.  The parties
       also agree not to, at any time, make any comments concerning the other to
       media,  prospective  or  actual  employers,   employees,   customers,  or
       prospects  which  could  be  reasonably  construed  as  being  in any way
       derogatory or negative of the other.

14.    Costs  of  Enforcement.   In  an  enforcement  action  relating  to  this
       Agreement,   the  prevailing  party,   whether  claimant  or  respondent,
       following  a  final   non-appealable   decision,   shall  be  immediately
       reimbursed by the other party for all its reasonable  out-of-pocket costs
       incurred during such action including attorneys' fees.

15.    Successors.  This Agreement  shall inure to the benefit of and be binding
       upon the successors and assigns, heirs, executors,  and administrators of
       the parties  except that  Executive may not assign or delegate his duties
       hereunder.
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16.    Termination.  This  Agreement may be terminated  only upon mutual written
       agreement of the parties.


Signed at Milwaukee, WI upon the date set forth above.


Effective Management Systems, Inc.                   Executive


By: _________________________               By: ___________________________
         Title                                                an individual

Witness: ___________________                Witness: ______________________