The disclosed embodiments relate to a system that preprocesses sensor data to facilitate prognostic-surveillance operations. During operation, the system obtains training data from sensors in a monitored system during operation of the monitored system, wherein the training data comprises time-series data sampled from signals produced by the sensors. The system also obtains functional requirements for the prognostic-surveillance operations. Next, the system performs the prognostic-surveillance operations on the training data and determines whether the prognostic-surveillance operations meet the functional requirements when tested on non-training data. If the prognostic-surveillance operations do not meet the functional requirements, the system iteratively applies one or more preprocessing operations to the training data in order of increasing computational cost until the functional requirements are met.