Have you ever wanted to transform a stack of papers into digital files that you can quickly search and edit? OCR has that kind of enchantment!
In this article, we will focus on what Optical Character Recognition is. But wait-a minute! It is not the primitive OCR that we are used to. We are talking about AI-based OCR. This is a significant improvement of classical digitization technologies that redefine the way we work with documents.
From Paper to Pixels: What is Optical Character Recognition?
Placing the emphasis on the basics, OCR is how to enable computers to ‘see’ and ‘understand’ text from image or a document by turning the data into text. Take a moment to imagine bundles of papers that a business has – contracts or invoices, written messages, etc. and OCR lets you search and edit text from those in a matter of seconds by the process of digitization. Additionally, it interprets pictures, scans them, edits characters, numbers, and signs, and prepares them for further embedding into presentation and documents. It is easy to use – digitizing, data capturing, and even sorting through tons of scanned images is a matter of a few clicks, increasing efficiency many folds.
AI-Enhanced OCR: A Giant Leap Beyond the Conventional Methodology
With conventional OCR software, page-level accuracy ranges from 98-99% in the industry. So, when it comes to the page containing 1000 characters, approximately 980 to 990 of those must be correct as these are the ones captured by the OCR software. The benchmarks for good OCR accuracy can be approximated at a CER (Character Error Rate) of between 1%-2% (or achieving 98-99% accuracy), average OCR estimation can be defined as having a CER of between 2% to 10% and a low or poor OCR estimation can be described as a CER of over 10% (or less than 90% accuracy). In the case of complex documents such as application forms, which include handwritten elements and extremely heterogeneous out-of-vocabulary materials, having errors of around 20% CER value can be considered acceptable.
Traditional OCR can easily read computer-generated text but can’t handwritten, or scanned documents with low quality pictures of the text. This is where the future lies, in AI-powered OCR. Now, due to the introduction of new-age technologies like AI, ML, and NLP, OCR can be used to recognize patterns, understand contexts, retrieve lots of information from unstructured documents with greater efficiency and even make improvements based on provided feedback. AI-powered OCR does not simply “read” a document but comprehends its data! From complex handwritten letters to compartmentalizing all the messy data distributed across irregular surfaces, AI-based OCR performs does outshines the traditional one in all parameters.
OCR in Business: Enhancing Productivity in Every Sector
OCR technology, specifically the AI-based modality, can be regarded as a strong address of productivity supercharging in every industry, be it automating invoice processing in finance, improving the time taken to get and manage patient records in healthcare, or enhancing the ways legal contract processes are managed. OCR offers businesses the ability to save time, reduce costs, and increase productivity while eliminating the need for manual data entry and the potential for human error. As a result, this technology is becoming a necessity for companies that are seeking growth while also improving their overall performance.
The impact of AI-powered OCR can be seen across a wide range of industries:
● Healthcare: OCR is beginning to play an important role in healthcare by streamlining medical record management and improving accessibility of data. Digitizing patient data, claims documents, and even prescription information is simplified with the use of AI enabled OCR which minimizes error and enhances efficiency coupled with searchability. Indeed, the work of OCR similarly reduces labour cost and administrative costs by reducing the need to perform repetitive tasks. Research indicates businesses experience up to 50 % improvement in productivity and 70% drop in processing time by automating mundane tasks allowing care providers to focus more on patient care rather than paperwork.
● Finance: Are you aware that an ordinary A4 paper document which is scanned can be validated within 10 seconds using OCR? Due to this automation decision-making becomes faster and efficiency becomes higher while streamlining financial workflows and improving the accuracy of manual data processing. Since popular AI based OCR technology is capable of accurately processing invoice documents, scanning tax forms, extracting information from contracts and bank statements, it finds practical applications in the finance sector. Automation empowered by OCR reduces manual data entry, cuts human errors, and speeds up financial processes viz. accounts payable and receivable, auditing, and compliance checks. With its ability to handle complex layouts and unstructured data, AI-driven OCR can also adapt to different financial document formats. Moreover, they enable real-time processing and integration with other financial systems, enhancing decision-making and improving overall operational efficiency.
● Legal: Law firms have started to use the OCR technology to cut the time spent in data extraction & document review. Report suggests that OCR helps to reduce manual data entry time by up to 90%! All this leads to faster case preparation and more efficient contract management. Also, streamlining legal workflows with this technology saves operational costs, allowing legal professionals to focus on higher-value tasks like client service and strategy.
●Business: In the case of the logistics sector, OCR automates data entry of shipping labels, invoices, and delivery receipts which in turn keeps the supply chain process active. There are many companies that deploy OCR systems who claim to have reduced the amount of manual data entry, thus resulting in faster processing rate and decreased human error. With this improved efficiency, there is an increase in the management of the supply chain, in processes such as inventory management and documentation of shipment. Moreover, a reduction in operational costs has also been noted by the organizations which have improved their accuracy and accelerated delivery in this competitive industry.
Across the board in these areas, AI-based OCR technologies definitely reduces time and facilitates precision, cuts cost and in the end, better judgment.
What’s Next for OCR and AI
Soon, AI-powered OCR is expected to be very intrusive and take over various tasks. The worldwide market for optical character recognition technology which was valued at $10.45 billion in 2023 is expected to rise to $43.69 billion in 2032 at a staggering 17.23% growth rate. As AI continues to advance, the quality of recognition, comprehension, and document complexity will only broaden.
Smart document OCR is spearheaded by AI, and it has the potential to enable businesses to leverage their full spectrum of abilities. Through the adoption of AI-powered OCR, companies are preparing themselves for a seamless and data-backed era.
Contact us to get started.