1. A method of drilling a formation, comprising: determining trends in historical data of analogous wells; acquiring real-time drilling data; pre-processing the real-time drilling data including applying data validation and data smoothing to the real-time data; acquiring a bit wear equation; determining a real-time bit wear prediction for a drill bit being used to drill the formation by using the pre-processed real-time drilling data to predict a bit efficiency factor and to detect changes in the bit efficiency factor over time; determining a real-time lithology prediction by processing the pre-processed real-time drilling data through a multilayer neural network trained using historical data from analogous wells; adjusting the drilling parameters for the drilling operation in real-time based on the real-time bit wear prediction and the real-time lithology prediction; and prompting to change the drill bit in accordance with a recommendation of an expert system monitoring the real-time bit wear prediction and which includes historical data relating to drill bits.