What are the differences?

The digital transformation has revolutionised the way companies process documents. Two important technologies play a central role in this: Optical Character Recognition (OCR) and Intelligent Document Processing (IDP). But what is behind these technologies, how do they work and what benefits do they bring?

Optical Character Recognition (OCR) focuses on recognising text in images or scanned documents and converting it into editable text. In contrast, Intelligent Document Processing (IDP) goes beyond this by combining OCR technology with other intelligent processing techniques to automate the entire document workflow.

What is OCR?

OCR stands for optical character recognition. This technology is used to analyse and recognise text in scanned documents or images and convert it into machine-readable text. Common applications include the digitisation of printed books, articles and physical documents such as invoices and receipts so that the text content can be processed, searched and stored electronically.

How does OCR work?

The OCR process starts with a file – be it a scanned document, a PDF file or a photo of a paper document. Modern OCR software automatically improves the image quality, increases the contrast and sharpens the resolution to maximise recognition accuracy. OCR algorithms then identify words and lines in the image and extract the recognised characters. This data is then matched against predefined patterns or templates to recognise the known characters and symbols. Technologies such as machine learning and neural networks are used to improve recognition accuracy and process different fonts, languages and complex layouts.

Benefits of OCR

OCR is indispensable for many industries, especially where a lot of work is done with documents. The advantages include:

  • Increased productivity: significantly reduces manual tasks such as data entry.
  • Accuracy: OCR achieves accuracy rates of up to 99.8 per cent and minimises errors.
  • Increased security: Digitisation of documents provides more secure storage and facilitates regulatory compliance.
  • Cost savings: Accurate data capture and effective digitisation reduce the risk of costly errors.

Practical example of OCR

A company receives numerous supplier invoices in paper form every day. With the help of OCR software, these invoices are scanned and the text automatically extracted. The relevant information such as invoice number, date, amount and supplier details are transferred to the company database so that they can be easily searched and processed. This saves the accounting team considerable time and minimises manual entry errors.

What is IDP?

Intelligent Document Processing (IDP) enables comprehensive automation of document processing by automatically capturing, extracting and processing data in business documents.

How does IDP work?

IDP uses OCR to convert printed or handwritten text into a machine-readable format and enhances this technology through the use of Artificial Intelligence (AI) and Machine Learning (ML). This makes it possible to read, understand and process structured, semi-structured and unstructured data in documents.

IDP categorises documents based on their content, layout or other characteristics and uses pre-trained models to extract business-critical information. The data is then validated and flagged for human review if there are issues. By integrating Natural Language Processing (NLP), IDP can also interpret the context of the information.

Benefits of IDP

IDP offers significant advantages and supports companies in their digital transformation:

  • Time savings and greater efficiency: processing times for documents can be reduced by up to 90 per cent.
  • Improved accuracy: Reduces errors and enables faster processes.
  • Better customer service: Faster and more accurate data processing improves the customer experience.
  • Faster decision making: Accelerated processing and extraction of insights enable more informed decisions.
  • Better security and compliance: Support compliance with regulations through standardised processes.
  • Scalability: IDP solutions can easily scale to larger document volumes.
  • Easy integration: Integrates seamlessly with various enterprise systems.

Practical example for IDP

An insurance company processes numerous claims reports every day. IDP not only scans these documents and extracts the text, but also understands the context. The software automatically recognises the type of claim, extracts relevant information such as the claim amount, policyholder data and claim description and validates this data. This speeds up the entire claims handling process considerably and minimises errors.

Differences between OCR and IDP

While OCR is mainly focused on recognising and converting text, IDP goes one step further by also understanding the meaning and context of the data. OCR is ideal for simple text recognition tasks, while IDP enables more complex document processing that requires deeper analysis and interpretation.

Our solution: DocBits

DocBits is our software solution for document capture and document processing. It is a fully AI and cloud-based solution that enables optical character recognition (OCR) and provides an automatic and self-learning capture process. By utilising advanced AI and ML algorithms, DocBits is able to extract critical data from invoices, delivery notes, forms and other documents with impressive accuracy. This minimises the need for manual intervention and speeds up your processing time.

Most importantly, in addition to extracting meaningful data, it can also provide numerous connectivity features for ERP systems such as Infor, SAP, Microsoft and many more.

Convince yourself of the capabilities that DocBits offers you!

Curious? Simply ask us


Image credits: Header- & Featured image by FELLOWPRO