Comprehensive Guide on Optical Character Recognition (OCR)

Optical Character Recognition (OCR) is the process of reading and transforming written or printed characters into machine-encoded texts a computer can alter. The application is responsible for recognizing the characters and producing a written document from a digitized or scanned document.

Here is a guide to understand Optical Character Recognition.

What is Optical Character Recognition?

OCR software processes the characters in text in such a way that a computer can now read and recognize text. After OCR processing, a user can search scanned documents for certain keywords and phrases. This helps transform your stack of paper records into digital files that are searchable and even editable.

Let’s put this definition into perspective, and look at an example.

This appears as the letter “A” to humans, but a computer views the image entirely different:

This is because machinery views text as combinations of “0”s and “1”s, also known as the binary system. OCR works similarly by converting images into binary.

How Does OCR Work?

Modern OCR programs employ feature detection with the help of neural networks that automatically detect features.

OCR software recognizes characters by slicing the image. and passing each piece through a neural network to check if it contains a closest matching character.

There are three fundamental steps in the optical character recognition process:

Image Pre-Processing

Enhancing the image to improve the quality of the text data.

Character Recognition

Extracting key characteristics from the image to identify individual characters.

OCR Post-Processing

Refining the recognized text using a dictionary to ensure accuracy.

Industry-Specific Use-Cases of Optical Character Recognition

Here are some real-life examples of OCR:

Communication

Converting physical documents into digital formats.

Banking

Processing checks and customer data for faster transactions.

Insurance

Automating claim processing.

Legal

Managing paper documents electronically.

Healthcare

Digitizing patient records for better management.

Tourism

Expediting check-in via passport scanning.

Retail

Redeeming certificates by scanning codes.

OCR’s Advantages for Enterprises

Large amounts of data are used by insurance and lending companies for assessment and settlement of claims. In the same way, data is crucial to the operations of commercial real estate, IT, healthcare, and law. OCR facilitates the simpler extraction of data for analysis from all of these documents

The infographic shows detailed advantages of OCR.

Best OCR Softwares in 2024

Here is a list of the best OCR software in the industry:

Docsumo

Docsumo is an intelligent document processing software that focuses on data extraction and financial document processing. This comprehensive solution addresses the enterprise-level document processing automation requirements seamlessly.

DupliChecker.com

Duplichecker is another well-known platform that provides useful tools for individuals working in different sectors. Its image to text tool leverages advanced OCR technology & data processing algorithms to ensure accurate output.

ABBYY Flexicapture

ABBYY Flexicapture is excellent for large organizations. It is ideal for decreasing manual data entry and input.

Amazon Textract

Textract is perfect for scanning professional papers such as resumes, contracts, and books. Its formatting is automatically identified and maintained.

Google Doc AI

Google is often the greatest at virtually everything, but their OCR technology is fairly restricted. It has been ranked one of the top OCR programs for individuals.

Limitations of Optical Character Recognition

OCR has mainly two restrictions:

Data Capture Accuracy

OCR technology accuracy may not be 100%. Hence, you need a second system that validates the output of the OCR engine.

Text Categorization

OCR needs additional intelligence to understand the meaning of captured text.

How Does Intelligent Document Processing (IDP) Differ from OCR?

Data structuring requires more than just OCR, which recognizes characters but can’t assign context to the text. With the help of AI and Machine Learning, IDP not only reads text but assigns context in order to provide more accuracy and usable data for analysis.

Let’s take a look at where IDP fairs compared to OCR:

• IDPs rapid processing saves time and money.
• It is much simpler to configure and initiate
• It is capable of totally automating document processing
• IDP can rapidly expertly interpret text and documents.
• It is able to learn and evolve without the need for ongoing assistance.
• IDP is easier to incorporate into your organization with minimal to no complications

OCR Technology FAQs

What is the full form of OCR?

OCR stands for Optical Character Recognition.

What is OCR scanning?

OCR scanning refers to retrieving information from documents and processing it in file management systems.

What are the benefits of OCR over manual data extraction?

• 99% data accuracy
• Easy document management
• Quicker data processing
• Reduced long-term costs
• Improved customer service

To get a first-hand experience of how intelligent OCR can benefit your business, sign up for a free demo with Docsumo and experience the difference today!