Intelligent Document Processing IDP

1. Intelligent Document Processing (IDP) leewayhertz.com/intelligent-document-processing-idp May 25, 2023 Human in the Loop Deliver to End System Inbound Documents Received Prepare Documents Understand Meaning, Intent & Document Type Extract Data Validate, Verify & Enrich Action Triggered Internal & External Systems LeewayHertz In the dynamic and data-centric landscape of modern business, documents serve as an essential channel through which information, ideas, and fuel for decision-making flow. However, traditional document processing methods have proven to be a bottleneck in the race for efficiency and accuracy. The labor-intensive, error-prone nature of manual data entry, coupled with the vast amount of unstructured data in various formats such as business documents, emails, images, and PDFs, has necessitated a paradigm shift. Welcome to the world of Intelligent Document Processing (IDP) – the new-age solution that harnesses the power of artificial intelligence technologies like Natural Language Processing (NLP), computer vision, deep learning and Machine Learning (ML) to simplify document management. IDP automates the extraction, processing and analysis of data from an array of documents, eliminating the need for manual data entry, reducing errors and significantly boosting efficiency. In the information age, where data is the new currency, approximately 80% of a company’s data remains unstructured, residing in texts scattered across documents of various forms. This poses a major challenge, requiring substantial time and resources to collate and make sense of it. But with IDP, businesses can tap into this unstructured data reservoir, extracting valuable insights that can drive strategic decision-making. Across industries, from finance to healthcare and government to education, IDP is making its mark, automating document-intensive tasks like invoice processing, contract management, compliance reporting and more. It goes beyond automation by providing businesses with tools to extract strategic value from their unstructured data. 1/25

2. Today, the global market for intelligent document processing, valued at over $1 billion in 2021, is projected to reach upwards of $6 billion by 2027, according to Straits Research. This indicates the growing recognition of IDP as an essential driver of digital transformation. This article dives into the world of IDP, demystifying its working, exploring its applications and showcasing its transformative potential. Discover how your business can leverage IDP to optimize operations and unlock unprecedented growth. What is Intelligent Document Processing (IDP)? What can IDP do? How IDP works: The detailed workflow The key components of intelligent document processing The role of AI and ML in intelligent document processing Use cases of IDP The technology stack of IDP Benefits of intelligent document processing Implementing intelligent document processing Future Trends in intelligent document processing What is Intelligent Document Processing (IDP)? Intelligent Document Processing (IDP) is an AI-powered document processing technique that not just scans and captures structured, unstructured and semi-structured data, but also understands it deeply. It is a modern development in the realm of document processing, a field that has been evolving since the early 1900s with the advent of document OCR (Optical Character Recognition). The progress in technologies like machine learning, natural language processing, and computer vision has reached a level where they can be effectively employed in tasks such as classifying documents and extracting data. IDP leverages these AI technologies to automate and enhance document-related processes. IDP stands out from conventional document processing due to its unique capabilities. It goes beyond mere recognition of words and characters, but rather interprets the meaning and context of the data. Thus, IDP does more than just capturing data – it provides valuable business insights and continuously enhances its performance by learning, which lessens the necessity for human involvement. To understand the concept, let’s say you have a pile of letters that includes utility bills, personal letters, promotional flyers, and so on. Now, if you were to manually sort them, you’d have to open each envelope, read the content, decide what it is (e.g., a utility bill, a personal letter, or a promotional flyer), and then put it in the appropriate pile. In the context of Intelligent Document Processing (IDP), it is as if you had a super-smart robot assistant to do this for you. This robot doesn’t just look at the envelope or the layout of the letter (which would be akin to older OCR technologies), it actually ‘reads’ and 2/25

3. ‘understands’ the content of each letter. It knows that a letter with “Dear Customer, your electricity usage this month was…” is a utility bill, and a letter that starts with “Hi, How are you?” is a personal letter. So, the robot, like IDP, can sort the letters into the right piles, but it does it much faster and without any manual effort on your part. Plus, it can handle thousands of letters in the time it takes you to sort through a handful. That’s the power of IDP in a real-life context! Different sectors are at various stages of integrating IDP. For instance, lenders who supported the Paycheck Protection Program (PPP) have extensively used IDP AI to expedite the review of pandemic loan applications. On the other hand, many mortgage lenders lag in adopting IDP and still rely heavily on manual document processing. One of the significant advantages of IDP is its scalability. Whether you are dealing with a small number of documents or a vast processing operation, IDP can adapt and handle the task efficiently. It drastically reduces the workforce requirements for managing and processing documents. However, human involvement is still necessary to some degree. While both automated and intelligent document processing belongs to the same technological family, they exhibit unique characteristics that set them apart. Automated Document Processing (ADP) Intelligent Document Processing (IDP) Scope of Processing Primarily focused on converting physical documents into digital format. Beyond digitization, IDP can understand, classify and extract information for further analysis and insight generation. Error Handling Errors or inaccuracies may need manual intervention for correction. With its self-learning ability, IDP can correct its mistakes over time and improve accuracy. Integration with other systems May require additional software or systems to manage and make use of the digitized data. Often integrated with other enterprise systems (like ERP, CRM, etc.) to directly feed and use the extracted data. Speed and Efficiency Speed and efficiency may vary depending on the complexity of the documents. Typically faster and more efficient as it can handle large volumes of complex documents and improve over time. Cost Initial costs might be lower, but manual error correction and additional software requirements could increase overall costs. Although initial costs might be higher due to the advanced technology, it can lead to significant savings over time due to higher efficiency, accuracy, and reduced manual intervention. Contact LeewayHertz’s data experts today! 3/25

4. Unlock the power of IDP for intelligent handling of unstructured data in your documents Learn More The actual differences may vary based on the specific ADP and IDP solutions being compared. Each solution might have its own unique features and capabilities beyond the general differences listed above. What can IDP do? Data extraction At the heart of Intelligent Document Processing (IDP) lies the capability to automate the extraction of data from complex, unstructured documents – a task that has traditionally been labor-intensive and required specialized human expertise. IDP systems leverage sophisticated technologies like natural language processing, optical character recognition (OCR), and machine learning to understand and extract relevant information from these documents. Firstly, OCR technology digitizes documents, converting images and handwriting into machine-readable text. However, OCR alone isn’t sufficient for extracting meaningful information, especially from unstructured data like emails, invoices, contracts, etc. This is where NLP and ML come in. NLP allows the IDP system to understand the context and semantics of the text, much like a human would. It can sometimes understand language patterns, interpret meanings, and even understand the sentiment. Coupled with ML, the system can continuously learn from its experiences, improving its accuracy over time. Machine learning algorithms are trained on large datasets to recognize specific data points in a document, like names, dates, amounts, etc. and extract them accurately. Whether rule-based or leveraging advanced deep learning, these algorithms possess the ability to comprehend and extract valuable information from highly complex and varied document structures. This advanced data extraction capability streamlines the process and enhances the accuracy and efficiency of data entry, reducing errors associated with manual data handling. Document classification and categorization A crucial feature of IDP is its ability to classify and categorize documents automatically. Advanced machine learning algorithms and natural language processing techniques power this ability. The first step in the classification process involves using Optical Character Recognition (OCR) to convert the text present in the documents into a machine-readable format. Once the text data is available, Machine Learning (ML) models, often supervised models 4/25

5. trained on labeled datasets, are used to classify the documents. These ML models may use a variety of features to classify documents, such as the presence of certain words or phrases, the structure of the document, or other identifiable patterns. In addition, NLP techniques can be employed to understand the context of the document, which can further enhance the classification process. For instance, semantic analysis, a subset of NLP, can help understand the meaning of the text and classify it accordingly. For scenarios where multiple documents are present in a single image or file, advanced IDP systems use segmentation techniques to separate each document before classifying them. Computer vision algorithms often guide this process, which can identify boundaries and structures within the image to segment different documents accurately. Once documents are appropriately classified and categorized, they can be routed to specific workflows or processes. This automated sorting and routing significantly reduces the document processing time and the chances of human error or bottleneck in processing, making IDP a highly efficient solution for managing large volumes of varied documents. Data validation IDP systems significantly enhance data quality and accuracy through the process of data validation. This process is facilitated by a combination of advanced algorithms and AI technologies, ensuring the extracted data is reliable and ready for further processing or analysis. The data validation process in IDP can be broadly divided into several steps. First, once the data is extracted from a document, it is initially checked for completeness and consistency. This involves ensuring that all necessary fields have been captured and the extracted data adheres to the expected format or pattern. Next, advanced AI algorithms cross-verify the extracted data against predefined business rules. These business rules can include data type restrictions, value range constraints, or specific business logic requirements. For instance, an invoice date shouldn’t be in the future or an order number should follow a specific pattern. The extracted data is validated against these rules to ensure its accuracy and relevance. In addition to business rules, IDP can leverage machine learning and natural language processing techniques to compare the extracted data with information from other documents or sources. For example, it can cross-check the details of an invoice with the corresponding purchase order to ensure consistency. Moreover, IDP systems can utilize external databases or data sources for validation, confirming the accuracy of the extracted data against trusted third-party information. 5/25

6. In the event that the extracted data fails the validation checks, the specific data fields can be flagged for manual review or correction. This ensures that inaccurate or unreliable data doesn’t progress further into business processes. By implementing these techniques, IDP significantly improves data quality, reduces the risk of errors, and ensures the data’s reliability, ultimately leading to more accurate business insights and decision-making. Intelligence and insights Intelligent Document Processing (IDP) extends beyond mere data extraction and validation. It plays a pivotal role in converting raw data into actionable intelligence and insights, enabling businesses to make data-driven decisions. Once the data is extracted and validated, IDP systems employ various AI technologies such as machine learning, natural language processing, and text analytics to analyze and interpret the data. Here is how: Semantic analysis: Using NLP, IDP can understand the context and semantics of the extracted data. It can recognize patterns, trends and anomalies in the data, providing a deeper understanding of the information contained in the documents. Predictive analysis: Leveraging ML algorithms, IDP can predict future trends or behaviors based on the analyzed data. For instance, it can forecast customer behavior, market trends, or potential risks, helping businesses be proactive rather than reactive. Sentiment analysis: This is particularly useful for customer-facing businesses. IDP can assess sentiments from customer communications or feedback, helping to improve customer experience and satisfaction. Data visualization: IDP can present the analyzed data in intuitive visual formats like graphs, charts, and dashboards, making it easier for decision-makers to comprehend complex data and derive insights. Integration with business intelligence tools: IDP systems can seamlessly integrate with existing Business Intelligence (BI) tools, feeding them with high- quality, structured data, enhancing the accuracy and reliability of business reports and analytics. With IDP, businesses can transform unstructured data from their documents into strategic insights. This not only improves operational efficiency but also drives innovation and growth. However, the specific analytical capabilities can vary among IDP systems, so it’s crucial to clarify what functionalities a particular system offers before implementation. How IDP works: The detailed workflow 6/25

7. Pre-Processing Intelligent Document Classification Data Domain Specific Validation Enhanced Validation Human-in- the-Loop Validation Extraction LeewayHertz IDP employs a sophisticated workflow that seamlessly combines various technologies to automate the process of data extraction and analysis from complex, unstructured documents. This workflow significantly streamlines document management and allows businesses to access and utilize their data more effectively. The IDP workflow commences with the capture of information from paper-based documents. Specialized scanning devices are used to transform these physical documents into digital formats. These digital documents then serve as the input for the IDP system. Once the documents are digitized, the IDP system employs computer vision algorithms to recognize and understand the layout of different document types. These algorithms are highly versatile and can effectively process scanned images, PDF files, and a plethora of digital and paper-based file types. The next stage in the IDP workflow involves natural language processing which is capable of identifying characters, symbols, letters, and numbers from paragraphs, tables, or unstructured text within the documents. This identification process, known as Optical Character Recognition (OCR), is further enhanced by employing techniques such as named entity recognition, sentiment analysis, and feature-based tagging. The result is a highly accurate interpretation of the information contained in the documents, with accuracy rates often exceeding 99%. Once the information is successfully read, it is then transferred into content management systems. This process allows the data to be easily accessed, analyzed, and utilized for a variety of business applications. With this introductory understanding of how IDP works, let’s delve deeper and understand the key steps in the IDP workflow: Step 1: Preprocessing of document In IDP, data extraction starts with Optical Character Recognition (OCR). When a document enters the IDP system, it begins with a step known as document preprocessing. The effectiveness of OCR heavily relies on its ability to distinguish characters or words from the document’s background accurately. There are a few key techniques used in this initial phase: 7/25

8. Binarization: Binarization converts a colored image into black and white pixels with black (pixel value = 0) and white (pixel value = 256). The goal here is to clearly distinguish between the text characters (black pixels) and the background (white pixels). Deskewing: The resulting image may be slightly tilted horizontally during scanning. This misalignment isn’t ideal for OCR, so techniques like the Projection Profile method, Hough Transformation method, and the Topline method are employed for correcting this skew. Noise removal: This step eliminates any small, unwanted dots or patches. This cleanup is essential to prevent OCR from mistaking these elements for actual characters. Step 2 – Document classification The classification of documents within the IDP workflow unfolds in three stages: Format identification: The system first determines the file format of the document. It discerns whether the document is a PDF, JPG, PNG, TIFF, or any other supported file format. Structure recognition: Next, the IDP solution distinguishes between structured, semi-structured, and unstructured documents. Structured documents follow a consistent template and layout. On the other hand, semi-structured documents have some degree of structure but can contain similar information at varying locations within the document. For instance, an invoice, which is a semi-structured document, might have the vendor’s address positioned differently across various invoices. To make sense of such data, the IDP solution requires a contextual understanding of the document and its content. Unstructured documents have minimal structure, yet they often contain critical data that needs to be extracted. For example, contracts are usually unstructured, with certain values such as dates or email addresses not being clearly identified. Document type determination: The final step in document classification involves identifying the type of document, i.e., identifying whether it’s an invoice, bank statement, tax document, shipping label, or some other form. The IDP solution’s success in accurately identifying and routing a document type for data extraction depends largely on the data it has been trained on. Contact LeewayHertz’s data experts today! Unlock the power of IDP for intelligent handling of unstructured data in your documents Learn More Step 3 – Data extraction The extraction of data within the IDP workflow typically consists of two main components: 8/25

9. i) Extraction of key-value pairs: This involves pulling out the values that correspond to distinct key identifiers within a document. ii) Table extraction: This process involves extracting line items organized in a tabular format. Several methods are employed to accomplish these tasks: OCR (Optical Character Recognition): OCR constitutes the initial phase of data extraction. While this step is crucial, certain errors can occur during OCR, such as: Word detection error occurs when the system fails to identify a text block in the image, often due to poor image quality. Word segmentation error: This happens when a word is interpreted incorrectly due to misidentification of interword spaces, varying text alignments, and spacing issues. Character segmentation error: This refers to the system’s inability to detect single characters within a segmented word, a common issue with cursive or connected alphabets. Character recognition error occurs when the system fails to correctly identify a character within a bounded character image. Techniques like dictionary look-up, k- mer, and n-gram language models can help rectify these errors. Rule-based extraction: Rule-based models are effective for structured and semi- structured documents. They can identify key-value pairs or line items by referencing positions within a document. Approaches like Named-Entity Recognition and the n-gram model are useful for identifying values associated with key identifiers. For instance, regardless of the placement of the invoice number in an invoice, the model searches for a set of strings adjacent to “Invoice Number” or “Invoice No.” Learning-based approach: Deep learning and machine learning hybrid data extraction techniques require supervised or unsupervised learning for training their models. Their accuracy rate and confidence score measure the efficiency of these models. As the volume of processed documents increases and the models receive more training and feedback, their accuracy improves. For instance, an ML-based model could be used in conjunction with a template-based OCR system to improve accuracy. Simple OCR correction methods combined with context-based natural language processing can enhance the quality and precision of extracted data. Step 4 – Data validation Data validation is a crucial stage in the IDP workflow, focusing on verifying and assuring data accuracy. This stage leverages advanced algorithms and pre-established rules to identify any discrepancies or anomalies in the extracted data. Several techniques can be used in this process: 9/25

10. Rule-based validation: This approach applies specific rules to the data. For instance, an invoice’s ‘total payable amount’ should match the sum of the ‘subtotal’ and ‘tax payable’. If there’s a mismatch, the system flags the document for review. Cross-document verification: This technique involves comparing the extracted data against other relevant documents or data sources. For instance, the system could cross-check the extracted invoice amount against a corresponding purchase order or contract agreement. Machine learning validation: Machine learning models trained on historical data can predict expected data values and flag anomalies. These models can be especially useful when dealing with large data volumes, providing an additional layer of validation to the process. External database validation: For some types of data, validating against an external database or API may be possible. For instance, a system could validate address data against a postal address database or a company name against a business registry. By combining these approaches, IDP systems can ensure high levels of data accuracy, reducing the risk of errors propagating downstream in business processes. However, it’s essential to note that data validation is an ongoing process, requiring regular review and updates to rules and models as business requirements and data structures evolve. Step 5 – Enhanced validation Enhanced validation in the IDP process can be significantly bolstered with the use of Robotic Process Automation (RPA). RPA, with its ability to automate repetitive, rule-based tasks, is particularly suited for streamlining data validation. Data is initially extracted from various documents using IDP technologies like OCR and ML in an IDP workflow. This extracted data can contain a variety of details such as names, dates, account numbers, transaction specifics, among others. Following the extraction, the data undergoes an initial validation where basic validation rules are applied. This could include checking if all necessary fields have been populated, confirming that numerical fields contain actual numbers, or validating that dates conform to the expected format. At this juncture, RPA can be employed for a deeper, enhanced level of validation. For instance, RPA can cross-verify the extracted data with information from other systems or databases. If a document contains a customer’s name and account number, an RPA bot could access the customer database to validate that the name and account number correspond correctly. While this task would be labor-intensive and time-consuming for a human to perform manually, an RPA bot can quickly and accurately carry it out. In the event of a discrepancy identified during the RPA validation process, the bot can flag the document for review. This allows a human operator to inspect the document and rectify any errors manually. This integration of human judgment ensures that the validation process remains both efficient and precise. 10/25

11. Moreover, the combined use of RPA and ML can facilitate an environment of continuous learning. If errors are identified and corrected during the validation process, this information can be fed back into the machine learning model, thereby enhancing its accuracy over time. Consequently, by integrating RPA into the IDP workflow, organizations can significantly elevate their data validation processes’ accuracy and efficiency, leading to notable time and cost savings and improved data quality. Step 6 – Human review While IDP aims to achieve complete automation, it’s important to acknowledge that no data extraction model can guarantee 100% accuracy. Thus, the IDP workflow incorporates an essential human element – the human-in-the-loop. This involves manual review and validation of any documents that have been flagged for potential inaccuracies during the extraction process. This human intervention serves two critical purposes. First, it ensures that the final data output is as accurate as possible, reinforcing the reliability of the IDP system. Second, it contributes to the supervised learning of the model, gradually enhancing its accuracy. This continuous process cycle of processing, reviewing, and learning helps the model evolve over time, increasing its performance as more documents are processed. The processed data is ready to be integrated into the user’s workflow upon successful extraction and validation. The IDP system has the flexibility to push this data to a database or export it in various formats to suit the user’s needs. Be it JSON, XML, PDF, or any other format, IDP workflows offer the versatility to convert documents into a format that best fits the user’s system or requirement. The key components of intelligent document processing Optical Character Recognition (OCR) Optical Character Recognition, commonly referred to as OCR, is a fundamental technology used in IDP. It’s the technology that enables computers to understand and convert different types of documents, such as scanned paper documents, PDF files, or images captured by a digital camera, into editable and searchable data. At its core, OCR technology analyzes the shapes and patterns of an image’s dark and light areas to identify each character. Advanced OCR systems can recognize multiple fonts and languages, making them highly versatile. In the context of IDP, OCR is the first step in the process of extracting valuable data from unstructured documents. It ‘reads’ the text from the document and converts it into a format that can be processed and understood by the rest of the IDP system. Without OCR, the system would not be able to ‘see’ the text in the document, making further processing impossible. 11/25

12. However, OCR is not infallible and is subject to errors due to poor image quality, unusual fonts, or complex layouts. To overcome these challenges, IDP systems employ advanced techniques such as image pre-processing to improve the quality of the input images, or machine learning to improve the OCR’s ability to recognize and interpret text correctly. Another layer of complexity in OCR within IDP comes from the need to understand and process not just individual characters but also how those characters form words, sentences, and ultimately, meaningful content. This is where NLP comes in. NLP is a field of AI that focuses on the interaction between computers and humans through natural language. In conjunction with OCR, NLP enables IDP systems to ‘understand’ the content in the documents, making it possible to extract not just raw data, but valuable, actionable information. Machine learning and artificial intelligence Machine learning and artificial intelligence serve as the critical engines powering intelligent document processing. They help transform unstructured data into structured information and extract meaningful insights from it. Machine learning: In the context of IDP, ML algorithms learn from training data, which includes a variety of documents and the correct output for each document. Over time, these algorithms ‘learn’ to recognize patterns and structures in the documents and improve their ability to extract the correct information. Two main types of ML are used in IDP: supervised learning and unsupervised learning. In supervised learning, the algorithm is trained on a labeled dataset, where each document is paired with the correct output. On the other hand, unsupervised learning does not require labeled data; instead, the algorithm identifies patterns and structures in the data on its own. ML plays a significant role in several stages of the IDP workflow, including document classification, data extraction and data validation. For example, ML algorithms can learn to classify different types of documents based on their content and structure, extract relevant information from these documents and validate the extracted data based on predefined rules. Artificial intelligence: In the context of IDP, AI is the overarching technology that brings together OCR, ML, and other technologies to create systems capable of processing documents intelligently. A key aspect of AI in IDP is NLP, which allows the system to understand, interpret, and generate human language. NLP enables IDP solutions to handle more complex tasks, such as understanding the context of information in a document, recognizing entities, and even understanding sentiments. This is particularly important when dealing with unstructured documents, where information is not neatly organized in tables or forms. 12/25

13. AI also enables IDP systems to improve over time. As more documents are processed, the system learns from any mistakes or corrections, becoming more accurate and efficient. Natural language processing Natural language processing or NLP plays a pivotal role in IDP that combines computational linguistics with machine learning and deep learning models to comprehend the intricacies of human language, making it a key component in IDP. Here’s how: Text extraction and understanding: NLP aids in extracting and understanding the text from various types of documents. It can recognize and interpret various text formats, including paragraphs, bullet points, tables, and even handwritten notes, making it particularly useful in dealing with unstructured data. Contextual understanding: One of the biggest challenges in document processing is understanding the context of information. For instance, the same word could have different meanings in different contexts. NLP algorithms can interpret the context based on surrounding text, helping to identify and extract relevant information accurately. Named Entity Recognition (NER): NER is an NLP task that identifies and classifies named entities in text into predefined categories such as names of persons, organizations, locations, expressions of times, quantities, monetary values, percentages, etc. In IDP, NER helps to identify specific data points within the document text, such as the name of a person, a company name, or an invoice number. Information Extraction (IE): NLP is also critical in information extraction, where the goal is to convert unstructured text into structured data. This involves tasks like extracting relationships between named entities, identifying the sentiment expressed in the text, or recognizing specific events or facts. Text classification and categorization: NLP enables IDP systems to classify and categorize documents based on their content automatically. This is done through text classification techniques, which can sort documents into predefined categories. Error detection and correction: NLP also plays a crucial role in error detection and correction in IDP. It can identify anomalies or errors in the extracted data, such as misspelled words or incorrect grammar, and correct them based on the context. Continuous learning: One of the significant advantages of NLP is its ability to learn and improve over time. As more documents are processed, the NLP algorithms can learn from any corrections or feedback, becoming more accurate and efficient. The role of AI and ML in intelligent document processing Artificial intelligence and machine learning play a pivotal role in intelligent document processing. They enable the automation of processes, extraction of insights from unstructured data, and continuous learning and improvement. Here’s a detailed look at the various ways AI and ML contribute to IDP: 13/25

14. Automated document classification: AI algorithms can automatically classify documents based on their structure and content. Machine learning models can be trained to recognize different types of documents, such as invoices, contracts, or receipts, and categorize them accordingly. This automation accelerates document processing and reduces the need for manual intervention. Data extraction: AI and ML are at the heart of the data extraction process. ML models can be trained to identify and extract specific information from various documents. For instance, an ML model can learn to identify an invoice number or the total amount in an invoice. Similarly, AI technologies like OCR can convert different types of handwritten, typed, or printed text into machine-encoded text. Natural language processing: As a subset of AI, NLP plays a crucial role in IDP. NLP enables the system to understand and interpret human language, extracting and analyzing information from unstructured data such as emails, reports, and articles. Data validation: AI and ML models can validate the extracted data by comparing it with predefined business rules or other data sources. They can flag potential inaccuracies or inconsistencies for review, ensuring the quality and accuracy of the extracted data. Continuous learning and improvement: One of the most significant benefits of AI and ML in IDP is their ability to learn and improve over time. As more documents are processed, the models can learn from any corrections or feedback and adapt their algorithms to improve accuracy and efficiency. This continuous learning capability is crucial for handling the complexity and variability of unstructured data. Predictive analysis: Machine learning algorithms can analyze historical data to predict future trends or behaviors. In the context of IDP, this could involve predicting the likelihood of errors in a particular type of document or identifying potential bottlenecks in the document processing workflow. Insight generation: AI and ML can generate insights from the extracted data beyond just processing documents. This could involve identifying data patterns, trends, or anomalies, which can inform strategic decision-making. Use cases of IDP Intelligent document processing offers various use cases across various industries, helping streamline operations, improve accuracy, and drive efficiencies. Here is a look at how IDP can be applied in different sectors: Lending: In the finance industry, IDP solutions can automate loan application processing, thereby significantly reducing manual data entry tasks and speeding up turnaround times. For instance, IDP can validate and verify customer data, credit reports, personal identification documents and income verification documents in mortgage loans. This ensures a more efficient and accurate credit risk analysis and quicker loan approvals. 14/25

15. Insurance: The insurance industry can leverage IDP to manage large volumes of customer data and conduct credit profile analyses. For instance, an insurance company could use IDP to process and analyze application forms, health records, or claim documents. By automating these processes, insurers can better assess risk, set premium rates, and offer personalized benefits to their customers. Logistics: The logistics industry often deals with a vast amount of data that needs to be validated, verified, and cross-checked. IDP can automate the processing of documents such as invoices, labels, and agreements, thereby eliminating the need for manual input and reducing the likelihood of errors. For instance, a shipping company could use IDP to automate the processing of shipping labels or invoices, leading to faster and more efficient operations. Commercial real estate: In the commercial real estate industry, IDP can be used to process documents like rent rolls, lease agreements, offering memorandums, and operating statements. For example, a property owner could use IDP to analyze lease agreements and determine the potential return on investment for renting, leasing, or buying new properties. This allows for more informed decision-making and can lead to more lucrative investments. Accounts payable: IDP can transform accounts payable operations by automating the processing of invoices and matching them against purchase orders in real time. Regardless of the layout or structure of the invoices, an IDP solution can accurately extract the relevant data and match it against the corresponding purchase orders. This automation reduces manual work and ensures accuracy and efficiency in the accounts payable process. The technology stack of IDP The technology stack of intelligent document processing typically includes a variety of tools and technologies, each with their unique roles in the IDP workflow. Here is a tabular representation of some of the key components of an IDP technology stack: Technology Category Specific Technology/Tool Role Optical Character Recognition (OCR) Tesseract, Abbyy, Google Cloud Vision OCR Converts different types of documents, including paper, PDF files, and photos into data that machines can process. Machine Learning (ML) TensorFlow, PyTorch, Scikit-learn Trains models to improve accuracy in data extraction and validation over time. Used in conjunction with OCR for extracting data from complex documents. Natural Language Processing (NLP) NLTK, SpaCy, Stanford NLP Helps understand, interpret, and manipulate human language, allowing for the extraction of data from unstructured text. 15/25

16. Technology Category Specific Technology/Tool Role Artificial Intelligence (AI) OpenAI, IBM Watson, Google AI Enables the system to learn and adapt from experience, improving its performance as it processes more documents. Robotic Process Automation (RPA) UiPath, Blue Prism, Automation Anywhere Automates repetitive tasks such as data entry, cross-verifications, and validations, thereby enhancing efficiency. Computer Vision OpenCV, TensorFlow Helps in recognizing different document layouts, even within a single image, and identifying and categorizing documents for further processing. Cloud Platforms AWS, Google Cloud, Microsoft Azure Provides a scalable infrastructure to host and run the IDP solutions, offering benefits like ease of access, security, and scalability. APIs/SDKs RESTful APIs, GraphQL Facilitates integration of IDP with other systems, enabling end-to-end document processing and data exchange across various applications. Databases SQL (like PostgreSQL, MySQL), NoSQL (like MongoDB, Cassandra) Used for storing extracted and validated data, acting as a single source of truth for downstream applications and processes. Contact LeewayHertz’s data experts today! Unlock the power of IDP for intelligent handling of unstructured data in your documents Learn More This table only scratches the surface of a comprehensive IDP tech stack and the exact technologies involved can vary based on specific use-cases and vendor solutions. Benefits of intelligent document processing Intelligent document processing offers an array of benefits that significantly enhance operational efficiency and effectiveness across various business sectors. Here is a detailed exploration of these advantages: Enhanced efficiency: The primary benefit of IDP is the significant boost in operational efficiency it brings. By eliminating manual data entry, IDP drastically reduces processing times, particularly beneficial for organizations handling large volumes of unstructured data. The automation of mundane tasks allows employees to focus on more strategic aspects of the business, thereby enhancing productivity. 16/25

17. Improved accuracy: Research shows that manual data entry into even simple spreadsheets carries an error rate between 18% to 40%, a figure that surges to 100% with complex spreadsheets. On the other hand, IDP systems boast an accuracy rate of at least 95%, mitigating the substantial risks associated with manual document processing. This heightened accuracy leads to more reliable data and less time spent on error corrections. Cost efficiency: IDP’s automation capabilities significantly diminish labor costs by handling repetitive and time-consuming tasks. Moreover, it curtails expenses linked to errors and inaccuracies, providing a clear avenue for cost savings. Informed decision making: IDP’s ability to extract valuable insights from unstructured data simplifies and enhances decision-making processes. This is particularly advantageous for industries that rely on data-driven decisions, such as finance, healthcare, and government sectors. With accurate, readily available data, businesses can make informed decisions swiftly and confidently. Seamless integration: IDP systems can easily integrate with other systems like databases or business intelligence tools for further analysis and reporting. This integration ensures that businesses can readily access and utilize the extracted data, bypassing the need for manual data input into other systems. Boosted employee productivity: By eliminating manual corrections, IDP improves the employee experience, leading to quicker approvals and reduced processing times. Furthermore, it allows employees to concentrate on more intellectually challenging tasks rather than manual corrections, thereby increasing operational productivity and job satisfaction. Implementing intelligent document processing Considerations when choosing an IDP solution When selecting an IDP solution, a number of considerations should be evaluated to ensure it aligns with your organization’s specific needs. Start by understanding your data processing needs. This entails identifying the format in which your data is received or stored (email, scanned document, physical paper, etc.), determining whether your data is structured or unstructured and assessing the volume and frequency of data you receive and the proportion that needs to be automated. After pinpointing your initial needs, ascertain which datasets would be optimal for IDP. Documents that consume a significant amount of time for manual processing are prime candidates. Once these datasets are identified, the focus shifts to choosing the IDP software. Key factors to consider include the expected accuracy level versus manual error rates and the potential for improvement, whether the IDP technology is template-based or equipped to manage complex data formats that lack a defined structure, and the software’s ability to read and comprehend all types of data and documents you currently handle. 17/25

18. Further considerations include the software’s compatibility with your chosen business tools, its capacity to handle your anticipated data volume, scalability, setup time, and the level of support available. Lastly, it’s crucial to compare competing quotes to gain a clearer perspective on pricing. Steps to implement IDP Implementing intelligent document processing in your organization can transform the way you manage data. Here is a step-by-step guide to implementing an IDP solution: Step 1: Define your requirements Identify the problems you are aiming to solve with an IDP solution. This could range from reducing manual data entry to improving data accuracy. Clearly defining your requirements will help you choose the right IDP solution. The possible categories in defining requirements for implementing an IDP solution can include: Business requirements: This would define the specific business problems you are aiming to solve. This could be reducing data entry errors, accelerating data processing, achieving regulatory compliance, or reducing labor costs. Data requirements: This involves understanding the nature and format of the data you handle. You need to define whether your data is structured or unstructured, the types of documents you work with (invoices, forms, emails, etc.), the languages these documents are in, and the volume and velocity of data your organization handles. Technical requirements: These requirements pertain to the IDP solution’s compatibility with your existing IT infrastructure. It includes things like integration capabilities with your existing systems, hardware and software requirements, scalability, and security needs. Operational requirements: This involves defining how the IDP solution will fit into your existing workflows. This includes user roles and access levels, turnaround times for document processing, and the level of human intervention needed in the process. Financial requirements: This would define your budget for implementing the IDP solution, taking into account both the upfront costs of the software and the ongoing costs for maintenance, updates, and potential scaling needs. Vendor requirements: This category involves defining what you expect from the IDP solution provider. This could include requirements related to customer support, training for your staff, assistance with initial setup and integration and their track record and reliability. Defining these requirements thoroughly will help you select an IDP solution that aligns with your organization’s needs and goals, thereby maximizing the value you gain from the technology. Step 2: Understand your data 18/25

19. Evaluate the type of data you handle. Is it structured or unstructured? What’s the format of the data (email, PDF, scans, etc.)? Understanding the nature of your data will guide you in selecting an IDP solution that can effectively process your data. When choosing an IDP solution, understanding the different techniques used by various IDP solutions to process and understand data is crucial. These techniques can significantly impact the performance and suitability of the solution for your specific use case. Some key techniques used for this are optical character recognition, Intelligent Character Recognition (ICR), machine learning, natural language processing, computer vision, robotic process automation and data validation. Understanding these techniques can help you evaluate how well an IDP solution can meet your specific document processing needs. It’s also a good idea to ask potential vendors for demonstrations or case studies showing how their solution has successfully been used in similar scenarios to yours. Step 3: Choose the right IDP solution When it comes to implementing intelligent document processing, there are various types of solutions available in the market, each with its unique strengths and capabilities. Here are some of the key types of IDP solutions: OCR-based solutions: These solutions primarily focus on converting printed text into machine-encoded text. They are excellent for processing structured documents, such as forms and invoices, where the data fields are located in the same place every time. Machine learning-based solutions: These solutions leverage machine learning algorithms to learn from the data and improve over time. They are particularly good at handling semi-structured and unstructured documents, as they can learn to identify patterns and relationships within the data. AI-powered solutions: AI-powered IDP solutions go a step further by employing advanced technologies like natural language processing and deep learning to understand the context of the data. They can handle complex tasks like sentiment analysis, entity extraction, and more. RPA-integrated solutions: These solutions combine the power of IDP with robotic process automation. They are capable of not only extracting and processing the data but also automating the subsequent steps in the workflow, such as data entry into a database or ERP system. Hybrid solutions: Hybrid IDP solutions combine several of the above technologies to offer a comprehensive solution. They can handle a wide variety of document types and complexities, making them a versatile choice for businesses with diverse document processing needs. Cloud-based solutions: These IDP solutions are hosted on the cloud and offer scalability, easy access, and often a pay-as-you-go pricing model. They are a good option for businesses that want to avoid the upfront costs and maintenance associated with on-premise solutions. On-premise solutions: For businesses that prefer to keep their data in-house due to security or compliance reasons, on-premise IDP solutions would be a better choice. They are installed and run on the company’s own servers and infrastructure. 19/25

20. Choosing the right IDP solution depends on your business needs, the type and complexity of the documents you process, your IT infrastructure, and your budget. It is always a good idea to request a demo or a trial before making a final decision. Compare different IDP solutions considering their capabilities, accuracy, scalability, ease of integration with your existing systems, and cost. The solution should be able to handle your data volume and complexity, and align with your organization’s future growth. Step 4: Set up the IDP system Implementing an IDP solution requires careful configuration and setup to ensure that the system can correctly recognize and process your specific documents and data fields. Here is how this process typically unfolds: Understanding document types: First, the IDP system needs to understand the different types of documents it will be dealing with. This could range from invoices and forms to letters and contracts. Each document type has its unique layout, structure, and data fields. Defining data fields: For each document type, you will need to define the specific data fields the system should extract. This could be anything from names and addresses on forms to item descriptions and prices on invoices. Training the IDP system: Next, the IDP system is trained using a set of sample documents. The system learns to recognize the different document types and the locations of the data fields within them. If the system uses machine learning, this training process will involve feeding it with numerous examples until it can accurately identify and extract the required data. Configuring the IDP software: The software then needs to be configured to process the documents according to your specific requirements. This could involve setting up rules for data validation, defining workflows for how the extracted data should be processed, and determining what actions should be taken when exceptions occur. Integration with existing systems: The IDP system also needs to be integrated with your existing IT infrastructure. This could involve setting up connections to your databases, ERP systems, or other business applications where the extracted data will be stored or further processed. Testing and optimization: Finally, the setup process involves testing the IDP system with real documents to ensure that it can accurately extract and process the required data. Any issues or inaccuracies discovered during this testing phase would need to be addressed, and the system fine-tuned for optimal performance. Throughout this setup process, your IDP vendor should provide support and guidance. They will likely have a team of experts who can assist with configuring the system, training the AI models, integrating with your existing systems, and troubleshooting any issues that arise. Step 5: Train the system 20/25

21. Training an intelligent document processing system is a crucial step in its implementation. The goal is to enable the system to accurately identify, extract, and process data from diverse document types. Here is a step-by-step explanation of the process: Sample document collection: The first step is gathering a diverse set of sample documents that the system will likely encounter. These documents should represent various types and formats the IDP system needs to handle. Data annotation: Once the sample documents are collected, they need to be annotated. This process involves manually marking up the documents to highlight the information that the IDP system needs to extract, such as names, addresses, invoice numbers, etc. This annotated data serves as the “ground truth” that the system will learn from. Model training: once the annotated documents are ready, they are fed into the IDP system. The system’s machine learning algorithms use this data to learn patterns and structures of the documents, and how to correctly identify and extract the required data fields. This phase is iterative and may require adjustments to the algorithms or additional training data to improve accuracy. Validation and testing: After the initial training, the system needs to be tested to assess its performance. This involves feeding it with new documents (not used in the training phase) and comparing the system’s output with the actual data. This helps in understanding the model’s accuracy and identifying any areas that need improvement. Model tuning: Based on the results of the validation and testing phase, the model may need to be fine-tuned. This could involve adjusting the model’s parameters, providing additional training data, or even changing the model structure in more complex cases. Active learning: As the system is used in real-world conditions, it continues to learn and improve over time. Any errors that the system makes can be corrected and fed back into the system for further learning. This process, known as active learning, allows the IDP system to continually adapt to changing document formats and improve its performance over time. Remember, the goal of training an IDP system is to achieve a high level of accuracy in data extraction, minimize manual intervention, and ensure the system can handle a variety of document types and structures. Step 6: Test and refine In the implementation of an intelligent document processing system, testing and refinement is a crucial phase designed to ensure the accuracy of data extraction and the overall performance of the system. It’s an iterative process involving several steps: Initial testing: Once the IDP system is set up and trained, it’s tested using real- world documents that haven’t been used during the training phase. This allows for an unbiased evaluation of how well the system performs when confronted with new, unprocessed data. 21/25

22. Evaluation: The system’s output is compared with the actual data from these documents. Specifically, it is the accuracy of the extracted data that is evaluated. This involves checking whether the system has correctly identified and extracted the necessary data fields. For instance, if the system is designed to extract invoice numbers, dates, and amounts from invoice documents, you would check whether these details have been correctly extracted from the test documents. Error identification: Any discrepancies between the actual data and the system’s output are identified. This could involve errors in data extraction, misinterpretation of document structures, or failure to recognize certain data fields. The source of these errors is then investigated. Refinement: Based on the results of the evaluation and error identification, adjustments are made to the system. This could involve refining the machine learning algorithms, providing additional training data, or making changes to how the system interprets different document types. Iteration: The testing and refinement process is repeated until the system’s performance reaches an acceptable level. This involves running the refined system on new test documents, evaluating its performance, identifying any errors, and making further refinements. Continuous improvement: Even after the system is deployed, it’s essential to maintain a feedback loop for continuous improvement. This involves regularly testing the system with new documents, assessing its performance, and making ongoing refinements. It is worth noting that the testing and refinement phase could require several iterations before the system’s performance is optimized. This is because each adjustment made to the system during the refinement phase could potentially impact how it interprets and processes documents. Step 7: Integrate with existing systems In the IDP implementation process, integrating the IDP solution with your existing systems, such as Customer Relationship Management (CRM) or Enterprise Resource Planning (ERP) software, is a pivotal step. This integration allows the IDP system to automatically feed the extracted data into these systems, streamlining your workflows and eliminating the need for manual data entry. Here is how this integration typically unfolds: Understanding the existing infrastructure: Before integration, a thorough understanding of your existing system infrastructure is crucial. This includes knowing the software interfaces, data formats, and how data flows between different systems. API integration: Most modern IDP solutions offer Application Programming Interfaces (APIs) that enable seamless communication between different software applications. Using these APIs, the IDP system can be connected to your CRM or ERP system. The IDP system sends data using a format and protocol that the CRM or ERP system can understand and process. 22/25

23. Data mapping: This involves defining how data extracted by the IDP system corresponds to fields in the CRM or ERP system. For example, if the IDP system extracts invoice numbers and amounts, these need to be mapped to the corresponding fields in your financial system. Testing the integration: Once the initial integration is done, it is important to test the setup to ensure the data is correctly transferred from the IDP system to the CRM or ERP system. This includes checking that all data fields are correctly populated and that the data is accurately represented. Refining the integration: Based on the results of the testing phase, the integration might need to be refined. This could involve adjusting the data mapping, changing how data is formatted before it is sent, or making other changes to the integration setup. Monitoring and maintenance: After the IDP system is fully integrated, it is vital to continually monitor the data transfer process and maintain the integration. This helps to ensure that any issues are quickly identified and addressed, and that the integration continues to work effectively as systems are updated or changed. By integrating your IDP solution with your existing systems, you can considerably enhance the efficiency of your business processes and reduce the time and resources spent on manual data entry tasks. Step 8: Roll out and monitor Once you are confident in the system’s performance, roll it out for full use. Regularly monitor the system’s accuracy and efficiency, and continually retrain it with new data to improve its performance over time. Implementing an IDP solution is not a one-time task but a continuous process of improvement. As your business evolves, so too will your data processing needs. Stay flexible and keep your IDP system updated to keep pace with your growth. Future trends in intelligent document processing As we cast our gaze towards the future of IDP, several trends begin to take shape. You can think of IDP and RPA as a dynamic duo, like a chef and a waiter in a restaurant. IDP acts like the chef who prepares and organizes the food, while RPA is the waiter who serves it to the customers. In a business setting, IDP prepares and organizes the data from documents, and then RPA comes in to serve or input this data into the various computer systems in a business. As we move forward, we expect these two to work even more closely together, making things run more smoothly and efficiently. The algorithms that underpin IDP, which are primarily rooted in AI and machine learning, are predicted to undergo substantial evolution. We can anticipate improvements in the use of Convolutional Neural Networks (CNNs) for image-based document processing, Recurrent Neural Networks (RNNs), and Long Short-term Memory (LSTM) models for 23/25

24. sequential data processing, and even Transformer models, like BERT or GPT-3, for enhanced natural language understanding. These advancements will lead to heightened accuracy and an increased ability to manage more complex and diverse document types. There will also likely be a greater emphasis on real-time processing to meet the growing demand for instant insights from businesses. As IDP technology continues to mature, it is expected to branch out into new areas such as customer service, extracting critical information from client communications to facilitate prompt and accurate responses. With IDP systems often dealing with sensitive data, the future will undoubtedly see a heightened focus on data privacy and security. Compliance with data protection regulations and the implementation of sophisticated security measures will become essential. The future also hints at a move towards cloud-based IDP solutions, which offer scalability, cost-efficiency, and ease of implementation. Additionally, with the rise of edge computing, we may see IDP systems deployed closer to the points of data generation, thereby reducing latency and enhancing real-time processing capabilities. Lastly, businesses will increasingly seek personalized IDP solutions, tailored to their unique needs, industry-specific documents, and workflows. These trends paint a future where IDP becomes an indispensable part of business operations, driving efficiency and extracting valuable insights from unstructured data. Endnote As we look towards the future, IDP is set to undergo further evolution, harnessing the power of more sophisticated artificial intelligence and machine learning algorithms. These advancements will allow IDP to tackle an even wider array of complex documents and data structures, offering greater flexibility and capabilities to businesses. In today’s data-driven world, where data privacy is of paramount importance, the emergence of private versions of IDP is a development of immense significance. Such privacy-focused advancements are set to broaden IDP’s potential even further, offering businesses the opportunity to protect their sensitive data while still reaping the benefits of automation and advanced data processing. Therefore, IDP is not just a testament to the transformative power of AI and ML, but it is also a beacon, lighting the way towards a future where data processing is not just faster, but smarter and more efficient; a future where businesses can harness the full potential of their data, for improved decision-making and operational efficiency, ultimately, driving growth and success. The future of IDP is bright, and its possibilities are virtually limitless. Ready to transform your business with intelligent document processing? Leverage LeewayHertz’s knowledge and expertise working with data, and drive success to your data-driven business! 24/25

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