“Real-time” decision making vs. “Getting real” at decision-time

“Real-time decision-making” is getting more attention in the intelligent energy field these days. David Latin, Executive Co-chair of the SPE Intelligent Energy 2010 Conference, outlines the theme of this year's conference by saying that “Real-time decision making has moved from delivering data to people to packaging the information to help people make decisions in real time affecting the bottom line.”

This evolution is encouraging, but it only addresses part of the challenge. Is “packaging information” enough to help you to make complex operational decisions in changing conditions? Decision-making really involves four activities:

1. Observation,
2. Analysis,
3. Evaluation of alternatives, and
4. Reaching a conclusion.

You can use real-time technology to support the first two steps (“packaging the information”), but how can you use technology to go beyond this, to help determine the “best” actions to take among many possible alternatives?

Altering assumptions, re-planning, or adjusting course in an informed, intelligent manner, as conditions change, “on the ground” at “decision time”, requires more than a real-time database and dashboard. In fact, the dashboard-centered paradigm of operations management is equivalent to driving a car by looking in the rearview mirror.

What, then, are the components necessary to support effective decision making at “decision time”? The solution must support the last two steps of the decision-making process: evaluation of alternatives, and reaching a conclusion. This requires three fundamental elements:

• Define your objective and one or more measurable performance indicators algorithmically (e.g., production, cost, risk, delay);
• Build a quantitative model that describes resources, activities, and constraints associated with resource allocation (timing, sequence, capacity, etc.);
• Use a decision support software platform that helps you to rapidly determine feasible alternatives, optimize alternatives based on quantitative performance objectives, and interactively determine the impact of different decision alternatives on key performance metrics.

Together, these three components can help you determine what to do at “decision time”. People often use tools such as Microsoft Excel and Project to respond to the first two requirements, but these fall short when it comes to step three. The third element—a decision support system platform that rapidly determines a feasible plan of action and allows interactive evaluation of different alternatives on key performance metrics—is what we have developed at Actenum. Our decision support platform, in concert with real-time data gathering and presentation technologies, delivers a complete “real-time decision-making” solution. In turn, this enables you to make intelligent resource allocation decisions at decision time, when it counts.