In this paper we argue that e-government initiatives need to take the competence involved in producing high-quality services for citizens into account. We draw on insights from a Pilot project in a Norwegian municipal aiming at radically re-structuring the Norwegian welfare sector and show how the competence to provide high-quality services rely on the collective achievement of individuals’ knowing-in-practice when dealing with particular cases and situations. Furthermore, we show how competence in terms of ‘processes of knowing’ is intrinsically related to organization structure and existing information systems (IS). Transforming the Norwegian Welfare Sector then, involves transforming a socio-technical network of heterogeneous elements, where existing processes of knowing plays an important role. Based on this, we then discuss some implications for implementing e-government in local municipals, and in particular e-government initiatives that aim at introducing all-embracing integrated IT-solutions across organizational and geographical borders. The paper concludes by sketching some implications for future research on e-government.