<PAGE>   1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 QUARTER ENDED MARCH 31, 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: 000-24409


                     INTERNATIONAL INTEGRATION INCORPORATED
             (Exact Name of Registrant as Specified in Its Charter)


                                    DELAWARE
                          (State or Other Jurisdiction
                         Incorporation or Organization)


                                   04-3169145
                                (I.R.S. Employer
                               Identification No.)


                         101 MAIN STREET, CAMBRIDGE, MA
                    (Address of Principal Executive Offices)


                                      02142
                                   (Zip Code)


                                  617-250-2500
              (Registrant's Telephone Number, Including Area Code)


                                       N/A
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

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 May 6, 1999 there were 16,934,349 shares of Common Stock, $.01 par value,
outstanding.

================================================================================

<PAGE>   2

                INTERNATIONAL INTEGRATION INCORPORATED ("i-Cube")

                                      INDEX

                                                                          PAGE
                                                                         NUMBER
                                                                         ------
PART I -- FINANCIAL INFORMATION:

Item 1.   Financial Statements

          Consolidated Balance Sheets as of March 31, 1999 
          and December 31, 1998                                               3

          Consolidated Statements of Income for the 
          Three Months Ended March 31, 1999 and 1998                          4

          Consolidated Statements of Cash Flows for the 
          Three Months Ended March 31, 1999 and 1998                          5

          Notes to Consolidated Financial Statements                          6

Item 2.   Management's Discussion and Analysis of 
          Financial Condition and Results of Operations                    7-13

PART II -- OTHER INFORMATION:

Item 6.   Exhibits and Reports on Form 8-K                                   14

Signatures                                                                   15

Exhibit Index                                                                16

Exhibit 27.1  Financial Data Schedule



                                       2
<PAGE>   3

                INTERNATIONAL INTEGRATION INCORPORATED ("i-Cube")
                           CONSOLIDATED BALANCE SHEETS
                 (in thousands except share and per share data)


<TABLE>
<CAPTION>
                                                             March 31,    December 31,
                                                              1999           1998
                                                             --------     -----------
                                                           (unaudited)
<S>                                                          <C>            <C>

ASSETS
Current assets:  
     Cash and cash equivalents                               $32,285        $36,057
     Short-term investments                                    5,483          8,302
     Accounts receivable, net of reserve of $112              10,005          3,880
     Unbilled revenues                                         2,964          1,988
     Prepaid expenses and other current assets                   832            602
     Deferred income taxes                                       156            157
                                                             -------        -------
          Total current assets                                51,725         50,986

Property and equipment, at cost:
     Computers and equipment                                   3,624          3,574
     Furniture and fixtures                                    1,035          1,029
                                                             -------        -------
          Total property and equipment, at cost                4,659          4,603

     Less- accumulated depreciation                            1,993          1,723
                                                             -------        -------
          Total property and equipment, net                    2,667          2,880

Other assets                                                     508            273
                                                             -------        -------
          Total assets                                       $54,900        $54,139
                                                             =======        =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                        $ 1,077        $ 1,366
     Accrued expenses                                          4,027          4,887
     Current portion of long-term obligations                     95             92
     Accrued income taxes                                      1,030             75
     Deferred revenues                                           543          2,227
                                                             -------        -------
          Total current liabilities                            6,772          8,647

Long-term obligations                                            207            231

Stockholders' equity:
     Preferred stock $0.01 par value; 1,000,000 shares
       authorized; no shares issued or outstanding                --             --
     Common stock $0.01 par value; 100,000,000 shares
       authorized; 16,812,820 and 16,316,202 shares
       issued and outstanding at March 31, 1999 and
       December 31, 1998, respectively                           168            163
     Additional paid-in capital                               30,678         30,164
     Note receivable from stockholder                           (533)          (533)
     Retained earnings                                        17,595         15,455
     Accumulated other comprehensive income                       13             12
                                                             -------        -------
          Total stockholders' equity                          47,921         45,261
                                                             -------        -------

          Total liabilities and stockholders' equity         $54,900        $54,139
                                                             =======        =======

</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements



                                       3
<PAGE>   4
                INTERNATIONAL INTEGRATION INCORPORATED ("i-Cube")
                        CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands, except per share data)
                                   (unaudited)
               
<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                                March 31,
                                                         ---------------------
                                                          1999           1998
                                                         -------       ------- 
<S>                                                      <C>           <C>     

Net revenues                                             $12,808       $ 8,828 
Project personnel and software costs                       5,351         3,612 
                                                         -------       ------- 
          Gross profit                                     7,457         5,216 
                                                                               
Operating expenses:                                                            
     Selling and marketing                                 1,414           850 
     General and administrative                            2,998         2,247 
                                                         -------       ------- 
          Total operating expenses                         4,412         3,097 
                                                         -------       ------- 

Operating income                                           3,045         2,119 
Other income, net                                            463           130 
                                                         -------       ------- 
          Income before income taxes                       3,508         2,249 

Provision for income taxes                                 1,368           877 
                                                         -------       ------- 
          Net income                                     $ 2,140       $ 1,372 
                                                         =======       ======= 
Earnings per share:                                                            
     Basic                                               $  0.13       $  0.10 
                                                         =======       ======= 
     Diluted                                             $  0.11       $  0.09 
                                                         =======       ======= 
Weighted average shares outstanding:                                           
     Basic                                                16,510        13,244 
     Diluted                                              20,256        16,031 
                                                         
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements




                                       4
<PAGE>   5
                INTERNATIONAL INTEGRATION INCORPORATED ("i-Cube")
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                                  March  31,
                                                             ------------------
                                                               1999       1998
                                                             -------    -------
<S>                                                          <C>        <C>    

Cash flows from operating activities:
  Net income                                                 $ 2,140    $ 1,372
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization                              270        200
      Provision for doubtful accounts                             60         --
      Loss on disposal of fixed assets                            --         --
      Deferred income taxes                                        1        (66)
      Changes in operating assets and liabilities:
        Accounts receivable                                   (6,185)       557
        Unbilled revenues                                       (976)       232
        Prepaid expenses and other current assets               (230)       (61)
        Accounts payable                                        (289)       244
        Accrued expenses                                        (860)      (594)
        Accrued income taxes                                     955        937
        Deferred revenues                                     (1,684)    (3,549)
        Other                                                   (235)       (46)
                                                             -------    -------
          Net cash used in operating activities               (7,033)      (774)

Cash flows from investing activities:
  Purchases of property and equipment                            (57)      (212)
  Purchases of available for sale securities                  (3,488)        --
  Sale and maturities of available for sale securities         6,307         --
                                                             -------    -------
          Net cash provided by (used in) investing
             activities                                        2,762       (212)

Cash flows from financing activities:
  Repayment of long-term obligations                             (21)       (58)
  Proceeds from exercise of stock options                        519         55
                                                             -------    -------
          Net cash provided by (used in) financing
             activities                                          498         (3)

Effect of exchange rates on cash and cash equivalents              1         --
                                                             -------    -------
Net decrease in cash and cash equivalents                     (3,772)      (989)
Cash and cash equivalents, beginning of period                36,057     10,822
                                                             -------    -------
Cash and cash equivalents, end of period                     $32,285    $ 9,833
                                                             =======    =======


</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements



                                       5
<PAGE>   6
                INTERNATIONAL INTEGRATION INCORPORATED ("i-Cube")
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
by International Integration Incorporated ("i-Cube" or the "Company") pursuant
to the rules and regulations of the Securities and Exchange Commission for
interim reporting. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements and should be read in conjunction with the Company's
consolidated financial statements and notes thereto on Form 10-K for the year
ended December 31, 1998. The accompanying consolidated financial statements
reflect all normal and recurring adjustments which are, in the opinion of
management, necessary for a fair presentation of results for these interim
periods presented. The results of operations for the three month period ended
March 31, 1999 are not necessarily indicative of results to be expected for the
full year.

2. EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed by dividing net income by the
weighted average number of common shares outstanding for the period. Diluted EPS
is computed using the weighted average number of common shares outstanding plus
the dilutive effect of common stock equivalents (using the treasury stock
method).

The following table reconciles the denominator of the basic and diluted earnings
per share computation as shown on the Consolidated Statements of Income (in
thousands):

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                 March 31,
                                                            ------------------
                                                             1999        1998
                                                            ------      ------ 
                                                               (unaudited)
<S>                                                         <C>         <C>        

Basic common shares outstanding .........................   16,510      13,244     
Stock options ...........................................    3,746       2,787 
                                                            ------      ------ 
                                                                               
Diluted common and common equivalent shares .............   20,256      16,031 
                                                            ======      ====== 
</TABLE>
                                                            

3. COMPREHENSIVE INCOME

The components of other comprehensive income for the Company generally include
foreign currency translation adjustments and unrealized gains and losses on
marketable securities classified as available-for-sale. The computation of
comprehensive income is as follows:

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                 March 31,
                                                            ------------------
                                                             1999        1998
                                                            ------      ------ 
                                                               (unaudited)
<S>                                                         <C>         <C>        

Net income ..............................................   $2,140      $1,372      
Other comprehensive income ..............................        1          -- 
                                                            ------      ------ 
                                                                               
Total comprehensive income ..............................   $2,141      $1,372 
                                                            ======      ====== 
</TABLE>
                                                            

4. RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to current period
presentation.




                                       6
<PAGE>   7
                INTERNATIONAL INTEGRATION INCORPORATED ("i-Cube")
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


OVERVIEW

The Company is an information technology ("IT") solutions provider specializing
in consulting, electronic business, and transformation services for the complex
IT environments inherent in the world's leading organizations. Since 1992, the
Company has helped clients leverage their current business processes and
technology infrastructure to create competitive advantage. The Company's
solutions are based on open standards and architectures that are independent of
any single vendor's hardware, software, or middleware. The Company makes use of
i-Structure, a set of methodologies and tools which embody "best" practices in
application development, project management, testing, and deployment. Utilizing
a fixed-time/fixed-price model and a unique client teaming approach, the Company
delivers solutions quickly, with full knowledge transfer to the client.

The Company derives substantially all of its revenues from consulting,
electronic business and transformation services. The Company's services are
principally provided on a fixed-time/fixed-price basis. In developing the fixed
price of a project, the Company follows a process that assesses the technical
complexity of the project, the nature of the work, the functions to be
performed, the resources required to complete the engagement, and the extent to
which the Company will deploy its internally-developed software tools to deliver
the solution.

For its larger projects, the Company's contracts typically call for an advance
payment from its customers upon signing, with additional payments required upon
the attainment of project milestones. For its smaller projects, the Company
typically receives payment ratably over the duration of the engagement. Deferred
revenues consist principally of amounts billed in advance for the Company's
technology consulting contracts that will be recognized upon performance and
amounts billed to customers in excess of revenues recognized to-date.

The Company has traditionally depended upon a few major clients for a majority
of its revenues. During the three months ended March 31, 1999 revenues from six
clients accounted for 13%, 13%, 13%, 12%, 11%, and 10% of the Company's net
revenues. During the comparable period in 1998, revenues from five clients
accounted for 23%, 17%, 16%, 11%, and 10% of the Company's net revenues. The
percentage of revenues coming from the top five clients decreased from 77% for
the period ended March 31, 1998 to 62% during the comparable period in 1999. The
loss of one or more major customers could have a material adverse effect on the
Company's business, financial condition, and results of operations. Although the
Company's strategy is to broaden its customer base, there can be no assurance
that such customer concentration will actually diminish, and the Company
anticipates that its results of operations in any given period will continue to
depend to a significant extent upon contracts with a small number of customers.
See "Certain Factors That May Affect Future Results".

The Company's revenues and earnings may fluctuate from quarter to quarter based
on the number, size, and scope of projects in which the Company is engaged, the
contractual terms and degree of completion of such projects, any delays incurred
in connection with a project, the accuracy of estimates of resources required to
complete ongoing projects, general economic conditions, and other factors. See
"Certain Factors That May Affect Future Results".




                                       7
<PAGE>   8

RESULTS OF OPERATIONS

The following table sets forth certain items included in the Company's
Consolidated Statements of Income as a percentage of net revenues for the
periods indicated:

<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                                   March 31,
                                                              ------------------
                                                               1999        1998
                                                              ------      ------ 
                                                                  (unaudited)
<S>                                                             <C>         <C>        

Net revenues ...............................................    100%       100%  
Project personnel and software costs .......................     42         41 
                                                                ---        --- 
     Gross profit ..........................................     58         59 
Operating expenses:                                                            
  Selling and marketing ....................................     11         10 
  General and administrative ...............................     23         25 
                                                                ---        --- 
          Total operating expenses .........................     34         35 
                                                                ---        --- 
Operating income ...........................................     24         24 
Other income, net ..........................................      4          2 
                                                                ---        --- 
     Income before income taxes ............................     28         26 
Provision for income taxes .................................     11         10 
                                                                ---        --- 
     Net income ............................................     17%        16%
                                                                ===        === 

</TABLE>
                                                                 
NET REVENUES

The Company's net revenues increased by $4.0 million, or 45%, to $12.8 million
in the three months ended March 31, 1999 from $8.8 million for the comparable
period in 1998. This increase in net revenues was primarily attributable to an
increased volume of projects from new customers and the leveraging of existing
client relationships to obtain repeat business. During the period ended March
31, 1999, the Company's five largest customers accounted for 62% of net revenues
as compared to 77% for the period ended March 31, 1998. In the periods ended
March 31, 1999 and 1998, the Company had six and five customers, respectively,
that each accounted for 10% or more of net revenues.

PROJECT PERSONNEL AND SOFTWARE COSTS

Project personnel and software costs consist primarily of compensation and
related costs of personnel dedicated to customer assignments and personnel
assigned to developing and enhancing the Company's methodologies and
technologies deployed during the project delivery process. Project personnel and
software costs also include fees paid to subcontractors for work performed in
connection with projects and non-reimbursed project travel expenses. Project
personnel and software costs increased 48% to $5.4 million for the period ended
March 31, 1999 from $3.6 million for the comparable period in 1998. As a
percentage of net revenues, these costs were 42% for the period ended March 31,
1999 and 41% for the comparable period in 1998. The absolute dollar and
percentage increases in project personnel and software costs for the period in
1999 were primarily attributable to the hiring of additional and more
experienced personnel required to deliver the Company's services and increases
in per person compensation costs. Project personnel headcount, which includes
contractors and employees working over 20 hours per week, increased to 222 at
March 31, 1999 from 138 at March 31, 1998.

SELLING AND MARKETING

Selling and marketing costs consist primarily of compensation and related costs
of sales and marketing personnel, travel expenses, and marketing programs and
promotion costs. Selling and marketing costs increased 66%, to $1.4 million, for
the period ended March 31, 1999 from $0.9 million for the comparable period in
1998. As a percentage of net revenues, these costs were 11% and 10% for the
periods ended March 31, 1999 and 1998, respectively. The absolute and percentage
increases in selling and marketing costs were primarily attributable to
increased spending on promotional activities and increases in selling and
marketing personnel. Selling and marketing personnel, which includes contractors
and employees working over 20 hours per week, increased to 23 at March 31, 1999
from 14 at March 31, 1998.

GENERAL AND ADMINISTRATIVE

General and administrative costs consist primarily of compensation and related
costs of the Company's management and administrative functions, including
finance and accounting, human resources, internal information technology, and
the costs of the Company's facilities and other general corporate expenses.
General and administrative costs increased 33%, to $3.0 million, for the period
ended March 31, 1999 from $2.2 million for the comparable period in 1998.



                                       8
<PAGE>   9
As a percentage of net revenues, these costs were 23% and 25% for the periods
ended March 31, 1999 and 1998, respectively. The decline in general and
administrative costs as a percentage of net revenues reflects slower relative
hiring of and more efficient utilization of administrative staff as well as more
efficient space utilization of the Company's facilities in 1999. The increase in
general and administrative costs in absolute dollars was primarily attributable
to an increase in general and administrative personnel. General and
administrative employees, which include contractors and employees working over
20 hours per week, increased to 38 at March 31, 1999 from 26 at March 31, 1998.

OTHER INCOME, NET

Other income, net consists primarily of interest income from the Company's cash,
cash equivalents, and short-term investment balances and interest expense
associated with fixed asset purchases made under the Company's equipment line of
credit and obligations under capital leases. Other income, net was $0.5 million
and $0.1 million for the periods ended March 31, 1999 and 1998, respectively.
The increase in other income, net was principally due to the increase in cash,
cash equivalents, and short-term investments, which included net proceeds from
the Company's initial public offering in the second quarter of 1998. The Company
invests its cash, cash equivalents, and short-term investments primarily in
overnight repurchase agreements, short-term U.S. Treasury and Agency bonds, and
short-term commercial paper.

PROVISION FOR INCOME TAXES

The Company's effective rate for federal and state income taxes was 39% for the
periods ended March 31, 1999 and 1998.

LIQUIDITY AND CAPITAL RESOURCES

Prior to its initial public offering, the Company met its working capital
requirements through cash generated from operations. In June 1998, the Company
completed its initial public offering of common stock resulting in net proceeds
to the Company of approximately $27.9 million. The Company also maintains a $5.0
million revolving line of credit (the "Line") with Silicon Valley Bank, which
expires in September 1999. Under the Line, the Company may borrow the lesser of
$5.0 million or 75% of eligible accounts receivable, as defined in the loan
agreement. The Company is required to comply with certain operational and
financial covenants under the Line if there are borrowings under the Line. At
March 31, 1999 the Company was in compliance with these requirements and no
borrowings have been made under the Line.

The Company's cash and cash equivalents balances decreased to $32.3 million at
March 31, 1999 from $36.1 million at December 31, 1998. The decrease in cash was
primarily due to cash used in operations. The Company's working capital was
$45.0 million at March 31, 1999 as compared to $42.3 million at December 31,
1998.

The Company's operating activities used cash from operations of $7.0 million for
the period ended March 31, 1999 as compared to $0.8 million for the comparable
period in 1998. The increase in cash used in operations was due principally to
an increase in accounts receivable of $6.7 million as compared to the comparable
period in 1998, an increase in unbilled revenues of $1.2 million as compared to
the comparable period in 1998, and a decrease in accounts payable of $0.5
million as compared to the comparable period in 1998. The increases in cash used
in operations for the period ended March 31, 1999 as compared to the period
ended March 31, 1998 were partially offset by a decrease in deferred revenues of
$1.9 million from the prior year period and an increase in net income of $0.8
million from the prior year period. The increase in accounts receivable and
unbilled revenues and the decrease in deferred revenues from December 31, 1998
to March 31, 1999 resulted from the timing of milestone billings on some of the
Company's large fixed-price contracts and billings from a number of new
engagements that were started near the end of the first quarter of 1999.

The Company's investing activities provided cash of $2.8 million for the period
ended March 31, 1999 as compared to having used cash of $0.2 million in the
comparable periods of 1998. Cash provided by investing activities during the
period ended March 31, 1999 consisted of maturities of short-term investments
and was partially offset by purchases of short-term investments and purchases of
property and equipment used to support the growing base of employees. Cash used
for investing activities during the period ended March 31, 1998 consisted
primarily of purchases of short-term investments and purchases of property and
equipment.

The Company's financing activities provided cash of $0.5 million for the period
ended March 31, 1999 which mainly represents the proceeds from the exercise of
stock options.



                                       9

<PAGE>   10

YEAR 2000

In the past, many information technology products were designed with two digit
year codes that did not recognize century and millennium fields. As a result,
these hardware and software products may not function or may give incorrect
results with respect to dates after December 31, 1999. This problem is generally
referred to as the "Year 2000" problem or issue. Substantially every company in
the computer or information technology industries, as well as every company
which relies on computer systems or which utilizes products which include
embedded technology face the Year 2000 issue.

The Company is completing the process of assessing its exposure to the Year 2000
problem. Generally, the Company is assessing its Year 2000 exposure in four
major areas: (i) problems arising from systems previously developed for
customers; (ii) delays in existing projects by the Company's customers as they
shift internal resources to complete their Year 2000 mitigation, and delays in
the purchasing patterns of clients and potential clients with respect to new
projects; (iii) Year 2000 problems faced by the Company's material suppliers
which could have an impact on the Company's business, results of operations or
financial condition; and (iv) Year 2000 problems existent in the Company's
internal IT systems and non-IT systems.

The Company has completed the assessment of systems previously developed for
customers and believes that they are Year 2000 compliant. However, there can be
no assurances that the Company's systems do not contain undetected errors or
defects associated with Year 2000 compliance issues, or that third party
software included in the systems developed by the Company do not contain Year
2000 problems. Certain of the Company's agreements with its customers contain
warranties that the systems developed by the Company will not experience Year
2000 problems. To the extent that a problem arises, the Company may be required
to expend funds to remedy the problem or, if asserted, to pay damages incurred
by the customer as a result of such failure. In addition, to the extent that a
Year 2000 problem is identified in a system developed under a contract without a
Year 2000 warranty, the Company may nevertheless expend resources to remedy the
problem, in certain circumstances, at its own cost. Although the Company's
contracts with its customers generally contain provisions which seek to insulate
the Company from, or limit the amount of, any liability arising from claims
asserted against the Company, there can be no assurance that any such
limitations would be upheld in favor of the Company. The Company is aware of a
growing number of lawsuits against other providers of IT services. Because of
the unprecedented nature of such litigation, it is uncertain to what extent the
Company may be affected by such litigation. Due to the complexity of the Year
2000 issue, upon any failure of critical client systems or processes that may be
directly or indirectly connected or related to systems or software designed,
developed, customized, or implemented by the Company as described above, the
Company may be subjected to claims regardless of whether the failure is related
to the services provided by the Company. If asserted, such claims (including the
associated defense costs) could have a material adverse effect on the Company's
business, operating results, and financial condition.

The Company is continually monitoring its major customers to determine their
Year 2000 readiness and the likelihood that the customers will delay scheduled
or in-process contracts, or defer future contracts with the Company, in order to
allocate more IT resources to solving their Year 2000 problems. In addition, the
Company continually seeks feedback from its salespersons as to the impact that
the Year 2000 readiness of prospective customers may have on the Company's
future revenues. There can be no assurance that the Company's customers and
prospective customers will not delay scheduled, in-process, or future projects
as a result of their own Year 2000 remediation efforts. Any such delays could
have a material adverse impact on the Company's business, operating results, and
financial condition.

The Company has completed the process of determining the nature and extent of
the work required, if any, to make its internal IT systems Year 2000 compliant.
The Company's internal IT systems consist principally of its accounting and
human resources software. The licensor of the software has indicated to the
Company in writing that the products are Year 2000 compliant. Based on currently
available information, the Company believes the expense associated with making
its internal IT systems Year 2000 compliant will be immaterial and has provided
for the enhancement of these systems in its operating and capital budgets for
the current fiscal year. However, if Year 2000 issues of which the Company is
not currently aware arise and are not remediated on time, or if the Company is
required to pay for any required updating, modification or replacement of the
Company's information systems, the Year 2000 issue could have a material adverse
impact on the Company's business, operating results, and financial condition.
The Company has also completed the assessment of its utilization of non-IT
systems which contain embedded technology such as microcontrollers. Based upon
currently available information, the Company believes the expense associated
with making its non-IT systems Year 2000 compliant will be immaterial and has
provided for the enhancement of these systems in its operating and capital
budgets for the current fiscal year. In addition to the Company's internal
systems, the Company relies on third party vendors in the conduct of its




                                       10
<PAGE>   11
 business. The Company has received assurances from its material vendors and
suppliers that there will be no interruption of service as a result of the Year
2000 issue. However, there can be no assurance that we will not experience
interruptions of service due to the Year 2000 issue resulting in a material
adverse effect on the Company. In addition, the failure on the part of the
accounting systems of the Company's clients due to the Year 2000 issue could
result in a delay in the payment of invoices issued by the Company for services
and expenses. A failure of the accounting systems of a significant number of the
Company's clients would have a material adverse effect on the Company.

Through March 31, 1999, the Company had not incurred material costs directly
relating to the remediation of Year 2000 problems. Pending further progress in
its assessment of its exposure to the Year 2000 problem, as described in the
preceding paragraphs, the Company is unable to estimate the costs of remediating
the Year 2000 problem that it may incur in the future.

The Securities and Exchange Commission has asked publicly-traded companies to
include a reasonable description of their most reasonably likely worst case Year
2000 scenario. As of the date of this report, the Company is uncertain as to
such scenario, although the Company believes that it may include a situation
where one of the Company's significant clients asks the Company to delay or stop
work on an ongoing project due to the client's internal Year 2000 issues. The
Company intends to address this uncertainty by continuing to assess its exposure
to the Year 2000 problem as described above. The Company intends to consider
this scenario in its financial and strategic planning for 1999 and 2000,
including in its projected personnel needs and other areas. As of March 31,
1999, the Company is not able to estimate revenue lost due to Year 2000 issues.

The Company has not yet established a contingency plan for addressing the most
reasonably likely worst case Year 2000 scenario. The Company intends to
establish such a plan to the extent the Company believes it necessary to do so,
based on the impact that such scenario is expected to have on the Company's
business, operating results, and financial condition.

SAFE HARBOR PROVISION

This Form 10-Q includes forward-looking statements (statements that are not
historical facts) such as statements about future net revenues and profits,
capital expenditures, liquidity sources and needs, working capital needs,
increases in personnel and related costs, opening additional offices, general
and administrative expenses, sales and marketing expenses, issues arising out of
the Year 2000 problem, and other costs, in quantitative terms, as a
percentage of net revenues, and in qualitative terms. These forward-looking
statements are subject to several risks and uncertainties and the Company's
actual future results may differ significantly from those stated in any forward
looking statements for a variety of reasons, including those set forth below in
"Certain Factors That May Affect Future Results". The Company makes no
commitments to disclose any revisions to forward-looking statements, or any
facts, events or circumstances that may occur after the date of this Form 10-Q
that may have an impact on the forward-looking statements.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

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

The Company's results of operations have varied significantly in the past and
may vary significantly in the future, on a quarterly and annual basis, as a
result of a variety of factors, many of which are outside the Company's control.
The Company's expense levels are based, in significant part, on anticipated
contract requirements and on other expectations of future revenues and are
relatively fixed in the short-term. Consequently, if revenue levels are below
expectations, including without limitation as a result of an unanticipated delay
in or termination of a customer engagement, expense levels could be
disproportionately high as a percentage of net revenues, and the Company's
business, financial condition, and results of operations would be materially
adversely affected.

The Company has historically derived, and may in the future derive, a
significant amount of its net revenues from major engagements with a relatively
small number of customers. Although the Company's largest customers have varied
from period to period, the Company anticipates that its results of operations in
any given period will continue to depend to a significant extent upon large
contracts with a small number of customers. The loss of or a reduction in the
level of services provided to one or more major customers would have a material
adverse effect on the Company's business, financial condition, and results of
operations. Furthermore, if a major customer were unable or unwilling to proceed
with a project or to pay the Company for its services on a timely basis, the
Company's business, financial condition, and results of operations could be
materially adversely affected.



                                       11
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Many of the Company's projects are large, complex engagements that are performed
by the Company over extended periods of time. The Company is generally paid for
these projects in installments, based on the achievement of certain milestones.
The Company's ability to successfully complete these projects and to earn the
milestone payments is based on factors within and outside the Company's control.
Furthermore, because of the significant numbers of IT professionals assigned by
the Company to these large projects, unexpected early terminations of any of
such engagements could result in underutilization of project personnel until
such persons can be redeployed to other projects. Conversely, an unexpected
delay in the completion of a major engagement could result in a delay in the
redeployment of project personnel to new assignments for which the Company is
contractually committed to achieve milestones on a timely basis. The Company's
failure or inability to meet a customer's expectations in the performance of its
services could give rise to claims against the Company or damage the Company's
reputation and adversely affect its ability to attract new business.

The Company generally undertakes projects on a fixed-time/fixed-price basis, and
warrants defined project deliverables as specified in mutually agreed upon
statements of work. In making proposals for fixed-time/fixed-price contracts,
the Company relies on its estimated costs and timing for completing the project.
Any increased or unexpected costs or unanticipated delays in connection with the
performance of fixed-time/fixed-price contracts, including delays caused by
factors outside the Company's control, could affect the profitability of these
contracts and have a material adverse effect on the Company's business,
financial condition, and results of operations.

The Company's business, financial condition, and results of operations may be
adversely affected by the Year 2000 problems described above.

The Company has experienced growth in net revenues and expansion of its
operations which have placed, and are expected to continue to place, significant
demands on the Company's managerial, operational, and financial resources. If
the Company's management is unable to manage growth effectively, the Company's
business, financial condition, and results of operations would be materially
adversely affected.

The Company's success depends to a significant extent on its ability to attract,
train, motivate, and retain highly-skilled IT professionals, particularly
project managers, software engineers, and other senior technical personnel.
There is currently a shortage of, and significant competition for, software
development and other IT professionals with the advanced technological skills
necessary to perform the services offered by the Company. This shortage has
caused wages for such professionals to increase, which increases operating costs
to IT service providers such as the Company. An inability to hire a sufficient
number of qualified employees or an inability to retain employees could have a
material adverse effect on the Company's business, financial condition, and
results of operations. In addition, even if the Company is able to expand its
team of highly-skilled IT professionals, the resources required to attract and
retain such employees may adversely affect the Company's operating margins.

The time between the date of initial contact with a potential customer and the
execution of a contract with that customer is often lengthy, typically ranging
from six weeks for smaller engagements to nine months or more for the Company's
larger engagements, and is subject to delays over which the Company has little
or no control, including customers' budgetary constraints, customers' internal
acceptance reviews, the success and continued internal support of customers' own
development efforts, and the possibility of cancellation or delay of projects by
customers. During such sales cycle, the Company may expend substantial funds and
management resources and yet not obtain project awards or revenues.

The Company's success may depend on its ability to make strategic acquisitions
from time to time. The competition to acquire appropriate companies is fierce,
with the result that the acquisition prices for these Companies may be high. In
addition, the high stock prices of publicly traded technology companies, that
are comparables for companies the Company may wish to acquire, have further
driven up the prices of potential acquisition candidates. As a result, there can
be no assurances that the Company will be able to make strategic acquisitions at
favorable prices, if at all.

The market for the Company's services is characterized by innovation and rapid
technological change, evolving industry standards, and changing customer
preferences. Both the needs of potential customers and the technologies
available for meeting those needs can change significantly within a short period
of time. The Company has derived a significant portion of its revenues from
projects based primarily on client/server architectures. These technologies are
continuing to develop and are subject to rapid change. Any factors negatively
affecting the acceptance of such technologies could have a material adverse
effect on the Company's business, financial condition, and results of
operations.



                                       12
<PAGE>   13
The Company's future will depend, in part, on its ability to continually enhance
its services, to develop services that address the needs of its customers and
potential customers, and to continue to improve its i-Structure methodologies
and technologies. There can be no assurance that the Company will be successful
in developing and marketing services that respond to technological changes, that
the Company will enhance its i-Structure methodologies and technologies on a
timely or cost-effective basis, or that the Company's services, methodologies,
and technologies will adequately meet the requirements of the marketplace.

The Company's future success depends to a significant extent on its executive
officers. The loss of the services of any one or more of these individuals could
have a material adverse effect on the Company's business, financial condition,
and results of operations.

The Company operates in a highly competitive and rapidly changing market and
competes with a variety of organizations that offer services similar to those
offered by the Company. Many of these competitors have significantly greater
financial, technical, sales and marketing resources and greater name recognition
than the Company. There can be no assurance that the Company will be able to
continue to compete successfully with its existing competitors or that it will
be able to compete successfully with new competitors.

The Company's success and its ability to compete is dependent, in part, upon its
proprietary rights, including its rights in i-Structure methodologies and
technologies. The Company relies primarily on a combination of copyright,
trademark, and trade secret laws to establish and protect its proprietary
rights. There can be no assurance that such measures will be adequate to protect
the Company's proprietary rights. Although the Company believes that its
services and technologies do not infringe the intellectual property rights of
others, there can be no assurance that infringement claims will not be asserted
against the Company in the future.

The Company's agreements with its customers typically contain provisions
designed to limit the Company's exposure to claims relating to the Company's
professional services and the applications developed by it. However, it is
possible that the limitation of liability provisions contained in the Company's
agreements may not adequately protect the Company or be effective under the laws
of certain jurisdictions. A liability claim brought against the Company could
have a material adverse effect on the Company's business, financial condition,
and results of operations.

Software applications as complex as those developed by the Company frequently
contain errors or defects, especially when first implemented. Any such defects
or errors could result in delayed or lost revenues, adverse customer reaction,
negative publicity regarding the Company and its services, and harm to the
Company's reputation, or could require expensive corrections, any of which could
have a material adverse effect on the Company's business, financial condition,
and results of operations.

The Company is subject to a number of risks that can adversely affect its
international operations, including difficulties administering its business
globally, managing foreign operations, currency fluctuations, restrictions
against the repatriation of earnings, the burdens of complying with a wide
variety of foreign laws, the uncertainty of laws and enforcement in certain
jurisdictions relating to the protection of intellectual property rights and
multiple and possibly overlapping tax structures.


                                       13
<PAGE>   14
PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          Documents listed below are being filed as exhibits herewith. 

          Exhibit 27.1 Financial Data Schedule

     (b)  Reports on Form 8-K:

          None.





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<PAGE>   15
                                   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.



Dated: May 17, 1999


                                    INTERNATIONAL INTEGRATION INCORPORATED

                                
                                    By: /s/ Lawrence P. Begley
                                        ----------------------------------
                                        Lawrence P. Begley
                                        Executive Vice President
                                        & Chief Financial Officer
                                        (Principal Financial Officer)





                                       15
<PAGE>   16
                INTERNATIONAL INTEGRATION INCORPORATED ("i-Cube")
                                  EXHIBIT INDEX


EXHIBIT NO.    DESCRIPTION
----------     -----------

  27.1         Financial Data Schedule





                                       16