What is Optical Character Recognition (OCR)?

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Optical character recognition is one of the most commonly used data entry techniques. It is the process of digitizing and recognizing written or typed material and is considered critical in converting printed materials into digital text files.

In the field of information management, optical character recognition plays an important role in assisting people in easily locating information and automatic capturing, and both are regarded as the most important features to have available in document management or ECM system.

In this article, we will define optical character recognition, discuss its importance, advantages, usage, and speculate on its potential.

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What is Optical Character Recognition?

By definition, Optical Character Recognition is an electronic or mechanical conversion of the typed, handwritten, or printed text images into machine-encoded text.

OCR technology aids in the automation of data extraction from typed or written text in a scanned document or image file and then translating the text into a machine-readable format for data processing such as editing or searching.

It allows a large range of paper-based documents in a variety of languages and formats to be digitized into machine-readable text and improves information accessibility for users.

OCR processing employs a mix of hardware and software to turn paper documents into machine-readable text.

To read text, hardware such as an optical reader (scanner) is utilized. An optical reader is a device included in most computer scanners that gathers visual information and converts it into digital information that the computer can show while software normally conducts sophisticated processing.

Prior to the invention of optical character reader technologies, the only way to digitize handwritten paper documents was to manually retype the text.

In the 1990s, when digitizing historical newspapers, OCR technology became prominent. However, technology has progressed considerably since then, and more sophisticated methods such as artificial intelligence and machine learning are now used to improve accuracy.

Feel free to check this timeline for historical information.

Industry Application of Optical Character Recognition

OCR text recognition is frequently utilized as a hidden technology, powering a wide range of well-known systems and services in our daily lives.

Because it is the most effective way to make information available, more and more industries are implementing OCR software technology to increase the efficiency of their operations.

It emerged as a unique and precise digitizing solution, and it is today employed by a variety of businesses.

This technology is employed in a variety of businesses that are plagued by information management challenges such as data loss, inaccuracy, and storage.

OCR technology has aided businesses such as healthcare, banking, and legal in a variety of ways.

Let’s go through some of the benefits of optical character recognition.


The banking industry is a large user of this technology. For instance, we utilize it when we deposit checks in ATMs. Checks are automatically scanned to recognize the amount, signature, and the depositor and it is all done without any human intervention.

  1. The check, which was handwritten, is scanned.
  2. Information is converted into digital text.
  3. Signature is validated.
  4. Real-time clearance.


Every year, hundreds of millions of medical claims are filed, which can result in a significant amount of paperwork and manual processing.

To go paperless and improve patient care, healthcare institutions are leveraging optical character recognition software.

Optical character recognition facilitates the submission and retrieval of medical records, claims, EOBs, and virtually any other medical document.

In addition, it helps institutions comply with HIPAA’s security regulations.

Legal professionals must have rapid access to and retrieval of information. To achieve this aim, the majority of large and well-known law firms have either begun or are in the process of digitizing their massive paper documents.

It is critical to turn these scanned papers into searchable ones by digitizing and utilizing this powerful technology.

The optical character reader will ensure that they can quickly discover any resource by searching for keywords inside the document’s text.

Optical Character Recognition in Content Management

While document management software should have many sophisticated capabilities, optical character recognition is regarded as one of the most important.

Have you ever wondered how document management or ECM solutions locate information while targeting a keyword in a document’s content?

With the help of this technology, when you search for a certain term, the system will return all the documents that fit the criteria based on their metadata or content.

Top content management companies have incorporated OCR technology into their platforms to convert scanned paper documents, PDF files, and images into editable and searchable data.

The system uses an optical character reader to recognize and interpret the text in documents in various languages and formats. This ensures that when you search for a certain keyword in the DMS or ECM system, the search results will return documents that contain the keyword.

It happens even though you aren’t aware of it! When a user imports a document into the system, it will automatically generate a searchable version and attach it to the document.

Employees would waste a lot of time if they didn’t have this capability. Consider what it would be like if an employee had to sift through stacks of paper to find the one they wanted!

Another benefit would be that employees no longer need to manually review documents or purge outdated records. Instead, by converting scanned text into editable text, document retention and preservation can be completely automated.

The intelligent automated data capture and use of it in the document implies that a more efficient method is used to assist users in quickly locating resources. The function of optical character recognition in automatically recognizing these critical data and inserting them as metadata into the imported document is important.

Nowadays, most companies require a means to redact or conceal essential information, such as personally identifiable information (PII), from unwanted access. Leveraging the power of AI can automatically recognize this type of personal content, redact it, and only reveal it to authorized persons.

Optical Character Recognition Benefits

With automated OCR text recognition, businesses can meet operational goals while also providing outstanding customer service. Increased data utility and accuracy add value to information, allowing businesses to make better decisions.

Boost Productivity

OCR software assists organizations in increasing efficiency by allowing for faster data retrieval when needed.

It allows businesses to minimize document processing time by up to 80%. When the manual process is eliminated, staff are free to focus on other vital elements of the business. This considerably boosts the company firm’s productive output.

High Accuracy

Inaccuracy is one of the most difficult aspects of data entry. Reduced mistakes and inaccuracies arise from automated data input methods resulting in efficient data entering.

Furthermore, automatic data entry may successfully address issues such as data loss. Because there is no human intervention, concerns such as inadvertently or intentionally entering incorrect information may be avoided.

Powerful Data Security

Any organization’s data security is of the highest significance. Paper documents are easily misplaced or destroyed. Natural factors can cause papers to be misplaced, stolen, or destroyed.

When you analyze, scan, and save data in digital format, it is safe in storage.

Storage Space

Automated OCR text recognition allows data to be kept in an electronic format on servers, eliminating the need to keep large filing cabinets. Thus, this software aids in the implementation of a paperless strategy throughout the firm.

Enhanced Customer Service

Rapid data access is critical in call center situations where clients want immediate access to product information. Automated OCR text recognition aids in the storage and retrieval of structured data about items and services at a faster and more accurate rate. This significantly minimizes the wait time and enhances the customer experience.

Reduced Costs

This is the main benefit any organization is looking for.

This technology helps firms to reduce cost across multiple disciplines and departments. it can reduce the need for data entry professionals, printing, shipping, and copying.

The time businesses save to allow employees to locate documents is incredible. In a matter of moments, virtually any document can be accessed.

It also allows the company to manage storage space in digital format, since they no longer need to maintain paper records that take up a lot of space.

Disaster Recovery

Storing data in electronic form enhances its security even in emergency scenarios. This technology helps businesses to easily recover data after natural disasters.

This is one of the most common uses. Digitally stored data may be accessed quickly, restoring business continuity.

The Future Of Optical Character Recognition

Today, intelligent OCR is seeing an unparalleled change as a result of the use of Artificial Intelligence techniques. It has evolved from a traditional image-to-text conversion technology to a human error checker.

AI is a tremendously effective tool for overcoming the limitations associated with classic approaches and producing far more accurate results.

Companies are beginning to look to AI-powered alternatives to increase productivity and extract meaning.

Combining optical character reader with AI will allow organizations to capture data intelligently and also understand their content. That means that AI technologies can search for mistakes without the need for human intervention.

As discussed previously, it will also help find sensitive information (PII) and automatically redact it to make it accessible to authorized personnel.

How do you think AI can help organizations in effectively capturing data?

What is Optical Character Recognition?

By definition, Optical Character Recognition is an electronic or mechanical conversion of the typed, handwritten, or printed text images into machine-encoded text.

Why OCR is Important?

It originated as a distinct and accurate digitizing solution, and it is now used by a wide range of industries.

This technology is used in a wide range of enterprises that face information management issues like as data loss, inaccuracy, and storage.

OCR Benefits

  • Boost Productivity
  • High Accuracy
  • Powerful Data Security
  • Storage Space
  • Enhanced Customer Service
  • Reduced Costs
  • Disaster Recovery

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