AI-Powered Document
Processing

$5.3 billion – that’s the annual wages companies collectively pay to data-entry keyers just in the US. This number doesn’t even account for all the operational expenses related to these jobs or cover the wages of other jobs, like accounting clerks, who also handle data entry. Clearly, many businesses, despite being digital, still use paper and need a way to capture intelligence from this analog data locked in paper or images. Organizations that find a better way to process this analog data will see better performance and capture greater value from the insights. What started with Optical Character Recognition (OCR) – where the application captures the analog data in digital format – has evolved into Intelligent Document Processing (IDP), where the document the data is captured but also understands this data.

We are in a time when data production is at an all-time high. For instance, in 2022, the world produced around 97 zettabytes of data, which will grow to 181 zettabytes by 2025. Most of this data is unstructured and unusable, driving the growth of IDP market to reach over $6 billion by 2027 with a CAGR of 37.5%. With so much value ready to be tapped into in just a few years, we will take a look at the current state, trends, and recent developments in the AI-powered document processing industry.

Where is IDP headed?

Expansion of Use Cases: Naturally, we are increasingly implementing IDP for broader use cases. IDP started with and has a stronghold in finance-related functions like accounts payable and invoice processing. Today, IDP is being implemented in broaders use cases like customer onboarding, HR processes, claims processing, loan processing, and much more in sectors ranging from healthcare and legal to education and manufacturing.

Personalization of IDP Solutions: Though the expanding use cases are evidence of the versatility and robustness of IDP solutions, each sector has inherent differences that call for personalization. Take banking, for example, the IDP system must be tailored to recognize and extract data from various financial documents, such as pay stubs, credit reports, bank statements, and tax returns. In a supply chain context, it should be capable of comparing and matching data across different documents – invoices, purchase orders, and delivery receipts – to ensure order accuracy and completeness. For retail, the IDP application might need to be customized to perform sentiment analysis, categorizing feedback as positive, negative, or neutral based on text content. We need to customize algorithms and workflows for specific business processes to deliver maximum value and address specific pain points.

The Shift to Cloud-native and Mobile Solutions: With the broader narrative of the digital transformation wave across sectors, the IDP platforms need to align and shift to a cloud-based mobile application. Cloud-based solutions offer agility and scalability, while a mobile-first strategy offers immediacy, convenience, accessibility, and an on-demand experience.

Emphasis on Security and Compliance: Given that IDP started in the finance industry, security and compliance were always crucial. As IDP extends to other sectors like legal, procurement, and sourcing, the focus on security and compliance becomes even more critical. Security is non-negotiable, and IDP solutions are also being integrated with stringent compliance frameworks.

IDP’s Part in the Digital Transformation Story

The essence of IDP lies in its ability to transform unstructured data into structured, actionable
insights. In any business, a significant amount of data comes in unstructured formats – be it emails, PDFs, scanned documents, or even handwritten notes. But IDP is more than the age-old task of taking data from paper to digital or doing it faster with lower costs. It is the starting point of the automation and digital transformation story. Look at the impact IDP creates. By converting unstructured or semistructured data into a structured format, IDP presents contextual insights to businesses. We will now have better visibility and transparency in our processes and timely, accurate data points for advanced analytics. That means deeper insights into our operations, customer behaviors, market trends, and more. With these insights, companies can tailor their strategies, offer better services, and stay ahead of the curve in their digital transformation journey.

Choosing Wisely: The Challenge of IDP Partner Selection

Many organizations operate with a degree of ambiguity in their processes. While IDP can handle unstructured formats, we will see less than optimal outcomes dealing with unstandardized processes. The successful implementation then hinges on the standardization of internal processes an the right expertise. We need a good mix of technical know-how and business experts who know the processes inside-out to work together to get the best out of the IDP framework.

Then, there is the question of whether to develop an IDP platform internally or outsource it to a
vendor. Should we choose a new-generation startup or a tech giant if we outsource? Startups dedicated to the IDP platform sound like a good choice, but their dependability and accuracy come into question. On the other hand, the brand value of tech giants who are branching out into IDP solutions sounds promising, but this is only one tiny part of their business.

A Transition Beyond Text

Looking further ahead, we see the IDP transition into UDP – Unstructured Data Processing, handling, and extracting meaningful information from a variety of data sources, including videos, images, and other non-textual or non-standard formats. The use cases UDP can handle will be explosive. Companies that have not yet started the journey or integrated IDP into their existing technical stack will fall behind. As we eagerly look forward to this inevitable transition, how do you plan to take advantage of this explosive growth?

Disclaimer Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the respective institutions or funding agencies

1. https://www.statista.com/statistics/871513/worldwide-data-created/
2. https://www.globenewswire.com/en/news-release/2022/08/24/2504154/0/en/Intelligent-Document-Processing-MarketSize-is-projected-to-reach-USD-6-38-Billion-by-2027-growing-at-a-CAGR-of-35-4-Straits-Research.html
3. https://www.forbes.com/sites/forbestechcouncil/2022/07/27/how-transitioning-to-intelligent-document-processing-couldtransform-enterprise-processes/?sh=3bc676a438e3