Intelligent Document Processing (IDP) software uses today's latest and best technologies to improve business workflows and save vastly more time and costs. In some situations, IDP software has reduced manual data entry work by 97%!
IDP also brings new benefits to businesses — such as increased revenues.
Our IDP software, Grooper, is at the heart of what we do at BIS. In this blog, you will discover how IDP solutions can improve your business and what some common use cases are.
Table of Contents:
- What is IDP software?
- 9 Most common use cases for IDP software
- What is the difference between IDP Software, document processing, and OCR?
- How does IDP software work?
- Benefits of IDP software
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9 Common Business Use Cases for IDP Software
IDP is used in virtually every industry and many different departments within companies. There are common examples like accounts payable departments who automate their invoice processing. There are also lesser-known examples like extracting data from Mill Test Reports.
Our solution users are finding new ways to leverage IDP software all the time. In fact, we had to create an annual award for the company who found a new way to use Grooper IDP to automate manual work.
Here are just a few of the many use cases that IDP software is being used at businesses and government agencies:
- Credit unions and banks use IDP software to process new member applications, KYC documents, loan documents, tax forms, balance transfer forms, and more
- Mailrooms are using automation through IDP to streamline incoming mail processing
- Colleges and universities are using IDP for student transcript processing to onboard student applications faster
- Insurance companies streamline claims processing with IDP
- Companies of every size and in every industry leverage IDP every day for automated invoice processing
- Federal government agencies are using IDP solutions to digitize their forms and applications
- State government agencies use IDP to digitize their records for fast search and knowledge of internal operations
- County governments use IDP to digitize their archived public records for fast retrieval
- Energy companies use Grooper IDP for oil and gas data management by understanding leases they may purchase and digitizing other paper documents
What is the Difference Between IDP Software, Document Processing, and OCR?
This can get confusing because people often use these terms in place of each other. But they refer to slightly different things.
Here are the similarities and differences:
| IDP Software | Document Processing | OCR | |
| A tool used by IDP and document processing | ✓ | ||
| Incorporates OCR | ✓ | ✓ | |
| Recognizes text on document images | ✓ | ||
| Recognizes text on electronic documents | ✓ | ||
| Organizes documents | ✓ | Sometimes | |
| Powers automated workflows | ✓ | ||
|
Uses AI tech to extract data |
✓ | ||
|
Extraction does not rely on strict templates |
✓ | ||
|
Easily expandable into new use cases |
✓ | ||
|
Flexible deployment options |
✓ |
Document processing refers to the software created to capture and extract text from document images and convert it to digital text. Document processing uses basic OCR to recognize and extract text. This technology really took off in the late 1990s but, as years have passed, has failed to meet newer document processing problems of businesses.
Document processing is also sometimes called legacy document processing.
Intelligent document processing (IDP) software, created in the mid 2010s, is the new generation of document processing technology. IDP was created to solve modern problems that legacy document processing was incapable of solving. Grooper, created in 2015, is a great example of this.
IDP incorporates artificial intelligence and several cutting-edge technologies that document processing doesn't use. These technologies include modern computer vision, advanced OCR techniques, natural language processing, machine learning, and now generative AI (GPT / LLMs).
IDP software powers business workflow automation in many ways that legacy document processing can't.
IDP software is focused on difficult use cases, like unstructured and semi-structured document automation. Examples include:
- Explanation of benefits (EOBs)
- Land leases
- Mill test reports (MTRs)
- Detailed line-item invoices
- Proof-of-delivery forms
Optical Character Recognition (OCR) is one of many tools used by document processing and intelligent document processing. It is used only to recognize data on document images, extract it, and convert it to digital text to make it searchable and usable.
IDP software imports documents for OCR. Importing is done by directly running a document scanner or watching electronic sources like email inboxes, sFTP sites, ECM systems, and/or network folders.
After importing, images are converted to text. The IDP software then uses digitized text to organize similar documents, associate relevant data into fields, validate data, and export data and documents to various business systems.
Also, OCR is not used to extract data from digitally created documents, like PDFs with text or CSV or EDI files. IDP software can extract that text natively without having to perform CPU-intensive OCR.
IDP software uses advanced OCR techniques like synthetic / multi-pass OCR to find and extract text with different fonts or handwriting accurately.
How Does Intelligent Document Processing (IDP) Software Work?
Specifically, intelligent document processing software converts data on document images into digital text that is usable by computers. There are 5 phases of IDP software:
- Importing the documents
- Cleaning up and recognizing document text
- Organizing documents
- Extracting the data
- Exporting data to business systems
They do this by using a variety of tools, like OCR, image processing, and many AI technologies like:
- Computer vision
- Natural language processing
- Machine learning
- Deep learning
- GPT models
IDP software was created for automated data extraction from scanned paper documents but can also get data from electronic documents. IDP solutions can get data from many different structures of documents, structured, semi-structured data, or unstructured documents and transform it into usable data.
Once the data is recognized and extracted, it is validated to ensure it is correct (optionally by a human-in-the-loop), and the documents / data are classified by preset business process rules.
The data and document images can then be exported for use in other business systems like ERPs, ECS/ECM systems, case management systems, workflow products, CRM systems, or any other system that needs the newly extracted data.
Benefits of Intelligent Document Processing (IDP) Software
The specific benefits of IDP software depend on the organization or department. Generally speaking, the more important that data entry is to an organization, the more value that can be gained by streamlining the data entry process.
For example, an accounts payable department will gain different benefits from AI document processing than a medical insurance company. An AP department can avoid late invoice payment penalties and cash in on early-payment discounts. Meanwhile, a medical insurance company would see reductions in validation errors and issues and generally a drastic reduction in processing time.
But both the AP department and the medical insurance company automate document processing for similar benefits. These benefits include: nearly eliminated painstaking manual data entry work, hundreds of hours of work each week saved, fewer errors, and data available faster.
Here are some great benefits of IDP software:
Time-Saving, Streamlined Workflows
Enterprises can cut their document processing time by 60 to 95% with IDP software. Any bottlenecks of documents waiting to be processed by hand can basically be eliminated. This means document data is available in ERP or other business data systems days or weeks faster.
Increased Revenues
This is a different benefit that other IDP solutions can't necessarily boast. We have customers who have improved services for their customers — or even created new products for customers — based on vastly improved processing with our Grooper IDP software.
Grooper has reduced our clients' processing time from months to days and from days to minutes. However long your manual process is taking today, Grooper will drastically decrease that processing time.
That's because modern, intelligent document solutions like Grooper are such a drastic improvement that companies can create new ways of doing business.
Improved Employee Productivity & Happiness
Few people, if any, enjoy manual data entry. It requires constant attention to detail to not commit keying errors. It is slow and painstaking work.
However, with automation, this tedious work can be handled by IDP software. These same employees can be re-directed to tasks that automation can never accomplish.
This work includes advanced decision-making or working with customers. These tasks are much more fulfilling and meaningful than data entry, leading to higher job satisfaction. And happy employees are better employees.
Easy Data Security and Compliance
All data from paper and electronic documents can be easily extracted and stored in business systems and databases. The data and corresponding documents can be easily found via search and access to sensitive data tightly controlled. That's not the case with paper.
Any documents with personally identifiable information (PII) or payment card information (PCI) can be redacted and placed in locations for employees to use. Then, original versions with PII or PCI can be placed in compliant, secure locations.
Other important benefits of this software, IDP especially, include:
- Human data entry errors nearly eliminated
- Increased visibility into internal operations and transactions
- Faster and better decision-making ability
- Improved visibility means critical data is never missed - like late payments or even discounts for early payments
- Improved customer service through customer data available many days earlier
- Improved revenue cycle management (better data, quicker turnaround times)
What is Intelligent Document Processing (IDP) Software?
Intelligent document processing (IDP) software is the next evolution of document processing technology. It uses advanced technologies (like OCR, natural language processing, machine learning, and GPT/LLCs) to convert scanned document images into text that can be used by computers — to be leveraged by humans.
IDP software's real value is in eliminating tedious and painstaking manual data entry work required by humans. These solutions do more than just scan documents. That step of the workflow is handled by a human manually feeding document pages into a scanner.
From that point, the IDP software receives the scanned images, then recognizes and extracts data, classifies / organizes the documents, and exports data into downstream business data systems.
IDP software can recognize and extract data from documents that have structured, semi-structured, and even unstructured data layouts. They were originally created to capture data from paper documents, but (depending on the software) IDP can capture data from digital documents as well.
