Decision Twin: A decision-making framework for asset management

The average adult makes roughly 35,000 conscious decisions every day. These range from the mundane—like what to eat and wear—to more significant ones, such as selecting which projects to invest in. Each decision carries short, medium, and long-term benefits and trade-offs. For capital investment decisions, which can cost millions of dollars and impact millions of people, a decision-making framework is essential.

With Direxyon, the decision twin is a structured representation of an organization’s decision-making process. By visualizing how organizations balance financial constraints and regulatory requirements alongside maximizing asset performance, decision twins serve as a decision-making framework, enabling organizations to see the impact of their decisions and create better strategic alignment long-term.

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The capital investment decision-making frameworks

Capital investment strategies outline an organization’s approach to deploying financial resources into long-term projects and assets. These strategies aim to enhance operational capabilities, support growth initiatives, and optimize overall financial performance.

Without capital investment planning solutions, the process can become laborious due to the multitude of decisions involved.

Decision-makers must evaluate risks, prioritize based on potential impact and feasibility, and assess the current state of the organization’s portfolio. They must manage these variables carefully, as uninformed decisions can create significant challenges.

Let’s explore common capital investment decision-making processes.

Manual evaluation

Manual evaluation requires decision-makers to gather and analyze data from financial reports, project proposals, and operational assessments.

This method is time-consuming and prone to errors due to the volume and complexity of the information.

Spreadsheet analysis

Many organizations use spreadsheets to organize and analyze data related to capital investments. This includes financial models, ROI calculations, and sensitivity analyses.

Spreadsheets, while more reliable than manual evaluation, struggle with large datasets and complex scenarios.

Direxyon’s Decision Twin

Specialized capital investment planning software like Direxyon provides a digital reconstruction of an experienced professional’s or department’s insights with the Decision Twin.

For instance, a city using Direxyon integrates best practices from asset managers to manage water infrastructure assets effectively. This digital reconstruction analyzes thousands of assets at once and identifies the best investments based on various criteria.

The Decision Twin works with predictive models and simulations to provide crucial capital investment insights for strategic decision-making and long-term planning.

Building a Decision Twin

Decision twins are built on Direxyon through drag-and-drop decision trees, providing a systematic, hierarchical way to navigate the various, intersecting criteria of which actions the organization would normally take.

Let’s say a municipality is trying to assess how much to invest in road interventions over the next 20 years. They’ll begin creating their decision-making framework by outlining the basic criteria of how road interventions are made, which may look like:

– Is there an intervention already planned for this year?

– If there is no intervention planned for this year, when was the last intervention?

– What sort of intervention did it last receive – A reconstruction? A resurfacing? Some patching?

– If it was a road resurfacing, how many rehabs has the road received since its last reconstruction?

– If it’s received more than one rehab, what is the pavement condition index (PCI) value?

– If the PCI value is between 20 and 40, the city needs to schedule a road resurfacing to maintain the desired level of service

Decision Twins
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The simulation follows the criteria established by the tree to demonstrate how each decision affect the assets and the underlying strategy.

Hierarchies and interdependencies

Direxyon’s decision twins don’t simply replicate the decision-making process regarding a single asset-type in isolation. These decision-making frameworks can factor in hierarchies, interdependencies, and constraints, like labor and budget available, to get an even clearer image of what long-term ripple effects are created by their decisions.

For example, if the same city asset managers are trying to determine how much they need to invest in road work over the next 20 years, the Decision Twins will factor in the baseline criteria of planned interventions, type and frequency of previous interventions, number of rehabs, and PCI values. But for simulation purposes, the Decision Twin will also factor in:

– Is there a sewer replacement planned under the right of way?

– Is there a watermain intervention planned at the right of way?

– Has the road budget cap been reached?

– Has the water infrastructure budget cap been reached?

With the Decision Twin, experts standardize their best recommendations and methodology into a single, auditable solution to examine how decisions are impacting investments over the long term.

Equipped with the ability to visualize the impacts of decisions over time, professionals across asset-intensive industries can compare the outcomes of different investment strategies to select the strategy that achieves their desired outcomes with the greatest sustainability, resiliency, etc.

Modifying Decision Twins

All strategies and best practices change over time.

Whether it be from new regulation, financial obligations, or simply wanting to test multiple capital investment strategies in Direxyon, the decision twins can be modified at any time.

Simply drag and drop new branches or rearrange existing ones into the decision tree and simulate to see how those new decisions impact the organization long-term.

Preserving expertise for the future

In addition to the challenge of understanding how our decisions impact and evolve over time, every industry stands to lose a great deal of decision-making experience in the coming years. Utilities, municipalities, and more are at risk of losing intuitive, experienced team members to retirement or turnover.

The decision twin’s primary benefit comes from understanding how our choices shape our future and affect the viability of strategy. But we can’t underestimate the value of having the opportunity to preserve 30-plus years of experience.

Decision twins offer an innovative solution to the complex world of decision-making. Digitizing expertise and visualizing choice impacts give professionals deep insights into their long-term strategies while preserving this knowledge for future, consistent, and sustainable practices.

Create your decision twin

Decision twins are an essential piece of Direxyon’s capital investment planning solutions. They allow organizations to standardize decision-making processes, preserve expertise, and analyze the impact of decisions long-term.

To see how your decisions are impacting your long-term strategic goals, contact us today.