We use documents every day for all sorts of tasks: reviewing contracts, approving invoices, updating employee records, and so on. Because of this, organizations generate more and more data daily, making manual document processing less and less viable. Inefficient processes lead to high costs, mistakes, legal woes, and ultimately the loss of customers. So the solution is — you guessed it — to adopt automation. More specifically, what you need is intelligent document processing.
In this blog post, we will explore what intelligent document processing is, how it works, what you can accomplish by using it, and some of its common use cases. Let’s dive in.
Capture Key Data from Your Documents Easily
Use Docparser to automate data entry, save time, and streamline your document-based workflows.
No credit card required.
What Is Intelligent Document Processing?
Intelligent document processing, or IDP for short, refers to the use of various AI technologies to automate document-related processes that are labor-intensive and prone to errors.
Instead of having people manage heaps of documents, intelligent document processing solutions can do that in a fraction of the time needed. To give you a concrete idea, some practical applications of IDP include:
- Extracting data from invoices, integrating it into an accounting system, and submitting invoices for approval.
- Capturing data from chat logs, forms, and emails to route it to the customer support team.
- Identifying terms, clauses, and other key information from lengthy contracts so that legal teams can review them without having to sort through documents.
Unlike standard document processing, which relies on manual data entry and simple automation tools, IDP uses a combination of OCR and AI technologies to process documents with much higher speed and accuracy. Specifically, it can extract, classify, process, analyze, and integrate data into systems, thus streamlining entire workflows with little to no human intervention.
What does IDP use?
Intelligent document processing software uses various AI technologies as well as OCR to process structured, semi-structured, and unstructured data found in documents like PDFs, images, emails, etc. Let’s go over the main categories of technologies used in IDP:
- Artificial Intelligence (AI): Powers the overall decision-making and automation of document processing tasks.
- OCR (Optical Character Recognition): Converts image documents into machine-readable text, making it easy to extract data from printed or handwritten documents.
- ICR (Intelligent Character Recognition): A more advanced version of OCR that can identify handwritten text with higher precision.
- ML (Machine Learning): Learns from patterns in data to improve document classification, extraction, and recognition over time without requiring explicit programming for every task. Applications of ML include chatbots, speech recognition, recommendation engines, computer vision, and more.
- NLP (Natural Language Processing): A major subset of machine learning that analyzes human language to understand and interpret it. Among other things, it can extract structured data from unstructured text, analyze sentiment and intent, translate content, create summaries, and more.
- RPA (Robotic Process Automation): Uses bots to perform repetitive and rule-based tasks. RPA automates business workflows like data transfers, order processing, customer support, etc.
An IDP system typically combines several of these technologies (not necessarily all of them) to process documents.
How does it work?
IDP processes the data within documents by following these steps:
- Pre-processing: First, the IDP system will clean and enhance the documents before they are processed. This includes noise reduction, deskewing, image enhancement, speckle removal, etc.
- Classification: Documents are classified by predefined types (invoice, contract, etc.) based on their contents and learned patterns.
- Extraction: The IDP system uses AI and OCR technologies to extract relevant data from documents.
- Validation: The system checks the extracted data for accuracy before it can be used. Unvalidated data is sent to a person who reviews it manually.
- Integration: Lastly, the IDP system sends the validated data to the applications and systems where it will be used. This way, data seamlessly moves from documents into systems, enabling the automation of workflows by triggering predefined actions.
What Are the Benefits of Intelligent Document Processing?
Companies and organizations that adopt IDP benefit from it in multiple ways. Here is an overview of how it transforms document management and contributes to your success.
Massive cost savings
By pulling and processing data from incoming documents, IDP eliminates most of the cost of data entry and human error. It also reduces reliance on paper documents and physical storage, further lowering operational costs.
Enhanced productivity
Once document-related processes are automated, employees can process larger volumes of documents in a much shorter amount of time. As a result, they have a lot more time to apply their talents to tasks and challenges that require human expertise. Faster processing times also lead to quicker turnaround on key business activities.
Better customer experience
Another advantage of implementing IDP is improving your company’s ability to serve customers. For example, when customers submit insurance claims, IDP automatically extracts data from forms, classifies claims, and routes them to the right department. This reduces the waiting period from days to hours which makes for a stellar customer experience. This enhanced responsiveness builds trust and increases customer satisfaction and loyalty over time.
The automation of data entry significantly reduces the chances of data entry errors, fraud, and security breaches. In fact, IDP can achieve data accuracy rates of 99%. This means that employees can work with more reliable and timely data, which translates into better reporting, fewer issues caused by inaccurate data, and more informed decision-making.
Scalability
IDP allows you to process larger volumes of documents as your organization grows without a proportional increase in workload. Historically, growing companies would run into issues such as overwhelmed employees, workflow bottlenecks, and data errors.
You won’t have to worry about this: your IDP solution can scale effortlessly to process more documents without overwhelming your staff. Your business can then address the growth of your activity without experiencing operational slowdowns.
Enhance security and compliance
IDP solutions are built with security in mind. With capabilities like digitization of paper documents, data encryption, access control, and audit trails, you can keep document-related data safe from cyber threats, data breaches, and fraud. As a result, your organization is better equipped to meet the compliance standards of regulations like GDPR or HIPAA. This, in turn, maintains the trust of customers and stakeholders alike.
Uncover new actionable insights
Last but not least, IDP can analyze large volumes of data to uncover hidden trends, patterns, and insights. By turning unstructured data into structured, analyzable information, you can surface business insights on spending patterns, customer behavior, sales opportunities, market trends, and so much more. These insights will inform strategic decisions that will make your company more competitive.
5 Use Cases of Intelligent Document Processing
In 2023, the North American market for IDP was valued at US$2.85 billion and is expected to grow at a high rate, with the rest of the world following the same trend. The reason is clear as day: organizations, both private and public, have a lot to gain from this technology. Let’s take a quick look at intelligent document processing use cases in five different industries.
Healthcare
This is definitely one of the sectors that benefit the most from intelligent document processing. Healthcare workers always need to record and access patient information to provide care and save lives. So processing data promptly and without errors is paramount.
IDP makes it easy to input and manage patient records, insurance forms, lab reports, prescriptions, billing documents. Healthcare professionals can easily extract personal information, medical history, handwritten notes, checkbox selections, and other data fields into their databases. By automating data extraction and classification, IDP reduces errors, improves patient data security, and accelerates processing times, empowering staff to provide better care to patients.
Legal
IDP is a big game-changer for the legal industry. It can extract client details, key dates, terms, clauses, and other critical information from contracts, forms, and other documents. This means legal professionals no longer need to spend hours examining every page of every document.
But that’s not all — IDP goes beyond that. In fact, it can provide summaries, flag compliance discrepancies, compare multiple versions of a document, send reminders for key dates, and more. By automating these tasks, legal teams can focus on more important work like in-depth analysis and client consultation.
Human resources
Any HR department can achieve significant productivity gains from implementing IDP. HR professionals can expedite candidate screening by extracting data from resumes, simplifying the recruitment process. The same goes for employee onboarding, during which a lot of paperwork is generated: forms, contracts, agreements, etc. With IDP, HR can easily extract and classify the data in onboarding documents, which allows them to avoid delays and errors, not to mention ensure a great onboarding experience for new hires.
Logistics
In the logistics industry, IDP automates the processing of invoices, bills of lading, delivery notes, shipping orders, etc. Handling these documents manually has always been a big challenge, so companies are adopting automation en masse. IDP reduces the administrative load, improves accuracy in data tracking, prevents delays and mistakes, and accelerates supply chain workflows.
Furthermore, intelligent document processing solutions can also create summaries of contracts and agreements, identify discrepancies and errors in carrier contracts, and even forecast demand and optimize routes.
Government
Government employees often need to process a tremendous — and sometimes overwhelming — amount of documents: applications, tax documents, permits, compliance reports, case files, financial documents, etc. They face several challenges, from digitizing paper documents to inputting data manually, meeting compliance regulations, and more.
By implementing IDP, public organizations can:
- Digitize records in a short amount of time
- Capture high volumes of data without errors
- Meet data privacy and security requirements
- Prevent fraud
- Provide faster and better service to the public
These are only a few of the industries that benefit from implementing intelligent document processing solutions. Pretty much every industry is going to adopt this technology to improve operational efficiency.
Get Started Today With Docparser
So that’s what you need to know about intelligent document processing. IDP uses a combination of OCR and AI technologies to prepare, extract, classify, validate, and process data from documents quickly and accurately. Its benefits range from lower costs to enhanced productivity and customer experience, higher data accuracy, security, better compliance, and more data-driven insights.
If this sounds like a fitting solution to your document processing challenges, you can get started today with Docparser. Currently, we have two AI-powered parsing templates: SmartAI Parser and ResumeAI Parser. You can extract data from documents or resumes and export it to your business systems seamlessly to cut down processing costs and streamline workflows. Give it a try and discover the power of intelligent document processing.
Capture Key Data from Your Documents Easily
Use Docparser to automate data entry, save time, and streamline your document-based workflows.
No credit card required.
