The Evolution of OCR to IDP and Why You Need a Modern IDP Solution

The Evolution of OCR to IDP and Why You Need a Modern IDP Solution

IDP has come a long way from its origins in template-based OCR — and today’s cloud-based technology is taking IDP even further. 

With the advent of new technologies, document processing has made leaps and bounds in the past several years. The addition of AI and machine learning are just the latest in a long line of advancements in the field of document conversion. 

Proven to save vast amounts of time and resources for major companies who need documentation fast, a next-generation IDP has immense potential for streamlining operations regardless of application or industry.

Modern IDP systems use AI-based technology to identify and record structured and semi-structured documents. As manual document processing has gradually become replaced by more sophisticated alternatives, IDP is now used in industries worldwide — from business to finance, medical institutions to governmental organizations. 

For large and small enterprises alike, IDP has become a critical part of everyday workflows. 

The Origin Story of IDP

The transformation from manual document processing to IDP didn’t happen overnight. Businesses have always needed a paper trail of documentation, but before the 1980s this paper trail was just that — a collection of paper documents, copied manually from spreadsheets, ledgers, or even by hand. 

Before the 1980s, virtually every company that needed document processing operated manually. This procedure was time-consuming and expensive, not to mention a tedious job that took a toll on employee morale. 

With the advent of Optical Character Recognition (OCR) technology in the 1970s (and popularization in the 1980s), an on-premises data conversion system soon became widely available. 

OCR had many shortcomings, and major businesses still spent loads of resources managing document conversion. Because OCR uses a template-based character recognition system, businesses still need someone to supervise the conversion templates manually. Plus, OCR only works for clear, structured data. 

To improve inefficiencies with the OCR algorithm, businesses in the 2010s began to use machine learning for streamlined document conversion. In a major turning point, the adoption of intelligent, AI-based document processing was born. 

How IDP Gained a Foothold

Plenty of legacy industries have used vast amounts of paper documentation to keep files intact. Some industries are notorious for extensive use of paper documents — especially finance, business, accounting, and medical offices. Consequently, leaders in these legacy fields were the first to make use of automated document conversion technology. Today, these fields continue to benefit from IDP and its AI-based approach to documentation. 

An AI-based approach to documentation doesn’t just improve efficiency — for some documents, it’s necessary. Larger organizations often collect information like invoices and tax records that come from many different sources, in many different formats. With a template-based OCR, structured documents require a unique template for each format. In contrast, IDP uses AI to identify and group data from semi-structured documents, so you can process a wide range of formats in hours instead of months. 

Aside from drastically reducing the time you spend on documentation, IDP uses less labor and fewer resources for a significantly cheaper solution. By now, it should be easy to tell why IDP has gained so much traction, so fast. 

The Future of IDP is in the Cloud

Since its origins in the early 2010s, IDP has progressed rapidly to include techniques like machine learning, natural language processing (NLP), intelligent character recognition (ICR), and handwritten text recognition (HTR). In today’s documentation environment, businesses equipped with a modern IDP solution such as Rossum can convert a wide range of semi-structured data with astounding accuracy and speed — all without a manual specialist to reformat data or supervise templates. 

Modern applications of IDP often use cloud-based technology to make the process even more efficient. A unified cloud-based solution is able to manage all of your IDP strategies from a centralized application. Plus, you can reduce on-site storage and free up your hardware with IDP storage in the cloud. Cloud-based IDP is highly scalable, and it makes IDP easy to access for multiple users. Plus, automation runs faster and more smoothly with a cloud-based IDP service. As IDP continues to grow in popularity, the future of documentation is in the cloud. 

Rossum: Your New IDP Solution

It’s a common misconception that only large corporations with huge amounts of data need to use IDP for documentation. Even smaller businesses that still use paper documents can benefit from the time and money saved using AI-based IDP. Plus, with cloud technology, IDP isn’t just for techies — your employees can easily access the cloud interface from multiple computers, with an intuitive interface. 

Whether an organization still uses paper or not, digitization is the key to documenting company data on a large scale. The history of IDP shows how businesses in a wide range of industries have been able to use IDP to their advantage, bringing paper and digital documentation into the twenty-first century.

IDP continues to grow in popularity — and with good reason. With Rossum, you can access a highly accurate IDP solution that uses cloud-based AI for your most efficient documentation ever. Incorporating IDP into your business model helps to improve workflow, save costs, and establish an efficient documentation procedure. Document processing technology is always evolving, and Rossum is proudly leading the charge. Contact us for a demonstration or to learn more about potential use cases for your organization.

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