What is intelligent document processing, and how does it work?
The vast amounts of information and data flowing through businesses today represent a golden age of opportunity.
That opportunity, however, only comes to those who put their data to work. From predictive analytics to business process optimization, leveraging data sets in actionable ways is the key to a business not just surviving, but thriving.
Apr 28, 2023 by Automation Hero
Yet the same data that presents so many opportunities can also be a burden. Having so much information to comb through and put to work can make it challenging to efficiently process, manage, and extract meaningful insights. Fortunately, with the advent of intelligent document processing (IDP), businesses now have a powerful tool that can help them streamline their document management and data extraction processes.
In this post, we will cover what IDP is and, crucially, what it is not.
We will detail use cases of IDP, where it can be applied, and why this technology is changing the way businesses operate. At the end of the post, you will have a complete understanding of IDP as well as a vision for how intelligent document processing can benefit your own organization.
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What is intelligent document processing?
Intelligent Document Processing is “a type of business workflow automation that uses artificial intelligence (AI) to read documents the same way that humans do.”
IDP can work with various types of documents, such as invoices, purchase orders, financial statements, medical records, and more. The technology can extract information from unstructured data sources such as scanned documents, PDFs, and images, which are traditionally difficult to process using conventional methods.
IDP can be used in conjunction with Robotic Process Automation (RPA), which automates repetitive tasks, to create an end-to-end automation solution for businesses. When IDP and RPA work together, entire business processes can be optimized from start to finish, reducing the need for manual intervention and allowing employees to focus on more strategic tasks.
What IDP is not
It’s important to clarify what IDP is not to dispel any misconceptions about its capabilities.
Firstly, IDP is not the same as Optical Character Recognition (OCR) or document scanning. OCR technology scans images of text or writing into files that can then be edited. OCR can certainly help businesses digitize their paper records, but it cannot understand the context of the document or extract meaningful insights from it. To be clear, OCR is one of the tactical steps that make up IDP. Furthermore, just as not all IDP solutions on the market are the same, not all OCR solutions on the market are the same.
Find the right OCR solution for you in our OCR Buyer’s Guide.
IDP is also not document scanning. Document scanning can be very useful for a business, but in and of itself, it does not extract business intelligence. Furthermore, document scanning does not create workflows or automate processes the way IDP does. While document scanning can make it easier to access and share documents, it does not enable businesses to extract insights from the data within the document.
It’s also worth noting that IDP is not limited to a specific industry or use case. While it is commonly used for tasks such as invoice processing or contract management, it can be applied to any industry or business process that involves large volumes of unstructured data. This includes areas such as healthcare, legal, and financial services, among others.
In summary, while OCR and document scanning can be helpful for digitizing documents, they cannot provide the same level of insight as IDP. IDP is not limited to a specific industry or use case and has the ability to extract meaningful insights from unstructured data.
How does IDP work?
IDP uses a combination of computer vision, natural language processing (NLP), and machine learning (ML) algorithms to analyze and extract data from unstructured documents. It is a complex and multi-step process that involves the following stages.
- Data extraction: The first step in the IDP process is data extraction. This involves scanning documents and extracting relevant data points using OCR technology. OCR converts scanned images into machine-readable text, which can then be used to identify and extract relevant information.
- Data validation: After the data has been extracted, it needs to be verified and validated to confirm that it is accurate and correct. This involves comparing the extracted data to check for inconsistencies and errors. Errors and inaccuracies are marked for review so they can be corrected and fed back into the automation.
- Data classification: Once the data has been extracted and validated, it is classified based on its type and relevance. For example, if the document is a receipt from a business expense, the relevant data points may include the receipt number, date, vendor name or location, and total amount. Since the layout of information in receipts is unstructured and totally dependent on the merchant, IDP software can be trained to recognize different types of documents as “receipts” and classify them accordingly.
- Data enrichment: After the data has passed through each of these steps, it can be further enriched by adding additional information from external sources. This could include adding data from other documents or databases, performing calculations, or conducting sentiment analysis.
- Data export: Finally, the enriched data can be exported to other systems or applications, such as an Enterprise Resource Planning (ERP) system or a Customer Relationship Management (CRM) system.
Overall, the goal of IDP is to automate the entire document processing workflow, from document ingestion to data export. By automating these tasks, businesses can save time and money while reducing the risk of errors and improving data accuracy.
Where can IDP be applied?
IDP has numerous applications across various industries, enabling organizations to improve efficiency, reduce costs, and improve the accuracy of their document processing workflows. While IDP is popular and can be used in many industries, three places where it is most prevalent are the finance, healthcare, and legal sectors.
Finance & Banking
In the finance sector, IDP can automate the processing of invoices, receipts, and other financial documents. This can result in faster processing times, reduced costs, and improved accuracy. IDP can also enable these financial services organizations to gain insights from their financial data, informing decisions made based on data instead of guesswork.
In the insurance sector, IDP can help process claims more efficiently and accurately. Insurance companies deal with a large volume of paper-based documents, such as claim forms, policies, and contracts. IDP can be used to extract important information from these documents, such as policy numbers, claim amounts, and customer details, which can be used to automate the claims processing workflow. This can result in faster turnaround times, reduced errors, and improved customer satisfaction. Additionally, IDP can help insurance companies identify potential fraud cases by comparing data from different sources and flagging any inconsistencies.
For manufacturers, IDP can help automate the processing of invoices, purchase orders, and other financial documents. This can help streamline the supply chain process and improve the accuracy of financial data. Additionally, IDP can be used to digitize paper-based manufacturing records, such as production logs and quality control reports. This can help manufacturers track their operations more efficiently, identify bottlenecks in the production process, and improve overall productivity.
Shipping & Logistics
Many times, people don’t think about the role IDP can play in less-visible industries like shipping. Automation Hero works with businesses in the shipping sector to help automate the processing of bills of lading, customs forms, and other shipping documents. This can help shipping companies reduce errors and delays in the processing of shipments, resulting in faster delivery times and improved customer satisfaction.
Additionally, IDP can be used to extract data from shipping documents, such as shipment weights and dimensions, which can be used to optimize shipping routes and reduce transportation costs. IDP can also help shipping companies comply with regulatory requirements, such as customs regulations and international trade laws, by ensuring that all necessary documentation is complete and accurate.
Healthcare & HR
In the healthcare industry, IDP can handle processing medical records, cataloging prescriptions, and submitting insurance claims. This improves the accuracy and pace of processing claims, which can result in faster payments and improved patient satisfaction. Additionally, IDP can help reduce errors and fraud in the processing of medical records, improving the overall quality of care.
Legal & Governance
In the legal industry, IDP can be used to automate the processing of contracts and legal documents, resulting in faster turnaround times and reduced costs. It can also help ensure compliance with legal and regulatory requirements, reducing the risk of errors and penalties.
Benefits of IDP
The benefits of IDP are numerous and include not just improved productivity but also reduced costs. With IDP, businesses can automate time-consuming and error-prone manual tasks, freeing up employees to spend their time, energy, and intellect on strategic initiatives and more meaninfgul tasks.
Consider the following benefits of leveraging intelligent document processing technology.
Improved data accuracy
One of the main benefits of IDP is improved data accuracy. By automating data extraction and validation, IDP eliminates the risk of manual data entry errors, ensuring that data is accurate and reliable.
IDP streamlines the automated document processing workflow, enabling organizations to process documents faster and with less manual intervention. This reduces the time and resources required for document processing, freeing employees to focus on more strategic tasks.
By automating document processing tasks, IDP can reduce the cost of manual labor and the risk of errors, resulting in cost savings for organizations.
IDP can help organizations comply with industry regulations and standards by ensuring that documents are processed accurately and in a timely manner.
Enhanced customer experience
IDP can help organizations improve the customer experience by enabling faster and more accurate processing of customer documents, such as loan applications or insurance claims. IDP can also be integrated with customer relationship management (CRM) systems or an email server to automate common customer requests and sort incoming emails based on intent classification.
Increased data insights
IDP can provide organizations with valuable data insights hidden in their documents. This can help organizations make more informed business decisions and identify areas for process improvement.
IDP is scalable, meaning that it can be used to process large volumes of documents without requiring additional manual labor or resources.
Why invest in IDP?
Investing in IDP can bring significant benefits to businesses of all sizes. When used correctly, the return on an investment in IDP can be a boon for a business, regardless of size.
One benefit is improved data accuracy. IDP automates the extraction and validation of data from documents, reducing the risk of manual data entry errors and ensuring reliable data. This can lead to better decision-making and an overall improvement in data quality.
Another benefit is increased productivity. IDP automates manual document processing tasks, freeing up employees to focus on more valuable tasks. This can result in cost savings, increased efficiency, and better allocation of resources.
IDP can also reduce costs associated with document processing, such as labor costs, by automating manual tasks. This can provide organizations with a significant return on investment, freeing up those resources to focus on more strategic initiatives.
Improved compliance is another benefit of IDP. By ensuring accurate and timely document processing, IDP can help organizations meet regulatory requirements and avoid fines or other penalties.
IDP can also give organizations a competitive advantage by enabling faster, more efficient, and more accurate document processing. This can lead to improved customer satisfaction, loyalty, and revenue growth.
Lastly, IDP can provide valuable data insights by extracting and analyzing data from documents. This can help organizations make informed business decisions, identify areas for process improvement, and gain a deeper understanding of customer needs.
Expand your business potential with IDP
By investing in IDP, businesses can stay competitive, improve compliance, and automate time-consuming and error-prone manual tasks.
By automating manual document processing tasks, IDP enables businesses to focus on more valuable tasks, leading to cost savings, increased efficiency, and a better allocation of resources. Furthermore, IDP can provide valuable data insights by extracting and analyzing data from documents, helping organizations make informed business decisions.
Automation Hero is a leading provider of IDP technology, using artificial intelligence and machine learning algorithms to automate the processing of unstructured documents. Our platform enables businesses to streamline document processing workflows and gain a competitive edge by improving efficiency and accuracy.
Unlock the business intelligence in documents with AI-driven IDP today
In a world where automated document processing is an essential part of business operations, Automation Hero’s IDP technology can revolutionize the way organizations manage their documents. By leveraging the power of AI and machine learning, Automation Hero is helping businesses improve their efficiency and productivity while minimizing the risk of manual errors. For more information on how Automation Hero can transform your document processing workflows, contact us HERE.
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