Blog / Automation

IDP vs. OCR: Which Is Right for Your Business?

The ability to accurately extract data from different types of documents is the core of effective business process automation. Two technologies that have become pivotal in this arena are intelligent document processing (IDP) and optical character recognition (OCR).

Although they serve the same purpose – extracting data from documents – they have different capabilities.

Optical Character Recognition: The Conventional Approach

OCR and its cousin intelligent character recognition (ICR) are mature technologies that extract machine and handwritten print from different types of documents, including scanned paper documents, PDFs, and images captured by digital cameras, and convert it into editable and searchable data.

Despite their impressive capabilities, OCR and ICR work only with structured, template-based documents like forms. Additional limitations include:

  • Inability to extract context from the data it captures
  • Difficulty processing unstructured or semi-structured documents, such as invoices, utility bills, receipts, and contracts
  • Difficulty processing handwritten documents, especially cursive (even for ICR)
  • No end-to-end processing capabilities, requiring more hands-on management

Intelligent Document Processing: The Next Level in Data Extraction

IDP is a more advanced and flexible technology, combining OCR software and artificial intelligence (AI) technologies like machine learning (ML) and its subsets, including natural language processing (NLP), deep learning, and neural networks. Intelligent document automation is self-learning, highly adaptive, versatile, and capable of dealing with both semi-structured and unstructured documents. Key advantages of intelligent document processing solutions include:

  • Ability to understand and interpret data contextually, mimicking human comprehension
  • Seamless integration with existing systems, facilitating end-to-end processing
  • Versatility in dealing with a range of document types, including handwritten materials
  • Rapid processing capabilities, diminishing the reliance on manual tasks

These features make IDP an ideal solution for businesses seeking more advanced document processing automation. With features like these, intelligent document processing solutions help organizations minimize errors, increase efficiency, enable remote work, and reduce operating costs.

In fact, the Everest Group states that “cost impact is now the key driver for IDP adoption as enterprises seek to realize tangible benefits from the technology, closely followed by improving operational efficiency and productivity.”

OCR vs. IDP Features
Feature OCR IDP
Includes Data Extraction ✔️ ✔️
Processes Structured Documents ✔️ ✔️
Works with Semi-Structured and Unstructured Documents ✔️
Understands Data Contextually ✔️
Recognizes Handwritten Documents Limited ✔️
Integrates with Existing Systems Limited ✔️
Supports End-to-End Processing Limited ✔️
Requires Significant Human Intervention ✔️
Offers Ease of Setup and Initiation ✔️
Adapts Through Self-Learning ✔️
Includes Error Correction Capabilities Limited ✔️
Automatically Classifies Documents ✔️
Processes Data in Real-time ✔️
Offers Multilingual Support Limited ✔️
Scales to Meet Demand Limited ✔️
Automates Workflows Limited ✔️

Choosing the Right Data Extraction Tool: OCR or IDP?

The choice between optical character recognition and intelligent document processing largely depends on the nature of your documents and the complexity of your needs. For simple, template-based documents, OCR could be a cost-effective solution.

However, for more complex or unstructured documents, or when dealing with large volumes of data, IDP is the more powerful and efficient tool, leveraging multiple intelligent technologies alongside OCR to effectively capture and process data from all types of documents.

In fact, intelligent document processing software has demonstrated its efficiency across a variety of scenarios, including:

Mailroom Management

Organizations transition from inefficient paper-based mailrooms to highly efficient virtual ones using intelligent document automation.

With a digital mailroom solution, your incoming paper mail is digitized and emailed files are converted into the appropriate format for processing. These digital documents are securely stored and automatically routed – based on your business rules – to the appropriate recipients via document workflow automation technology.

This means that employees can easily access the files they’re looking for instantaneously. With 73% of workers wasting 1-3 hours every day searching for documents, this is a huge time-saver.

Invoice Processing

Many accounts payable automation projects fail because they rely too heavily on traditional optical character recognition solutions that require complicated setups, don’t eliminate manual tasks, and lead to long processing times. When it comes to processing invoices, advanced technology that can automatically extract data from all types of documents is key.

Invoice processing solutions built on intelligent document automation technology offer 99.95% data capture accuracy, sophisticated line-item pairing, validation tools, and a fast setup. These are all features that AP automation solutions that rely on antiquated OCR systems just can’t deliver.

MetaSource: An Expert in Data Extraction Technologies

Having worked across many applications and industries for decades, MetaSource understands the challenges and limitations of traditional OCR, as well as its benefits and ideal applications. We work closely with our clients to determine the best solution for their needs and provide support every step of the way – whether it’s for an OCR solution or a more advanced intelligent document processing one.

Whether you are in the market for automated document processing technology or looking for intelligent document capture to enhance your business processes, MetaSource is here to guide you. Our diverse array of offerings can meet all your document workflow automation needs.

Want to learn more about how our intelligent document processing solutions can benefit your business? Contact us today. 

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