Reducing Inefficiencies: Using ICR and OCR to Streamline Business Processes

According to, the average salary for a data entry clerk is $12.86/hr or $24,700 a year. These are people whose sole function is to input data into your system, verify it, and appropriately process it. How many people do you have doing this kind of work in your company? How much are you paying them? Could their time and talents be put to better use?

For many businesses, data entry and processing is a huge part of their business process. It is how they get information provided from outside sources into their data management system so that they can fill orders, process payments, address issues, and make informed business decisions. This puts data entry at the heart of all business enterprises and creates a critical need for more efficient and accurate data entry processes. One way to enhance the efficiency of data entry is to automate data input.

This can be accomplished using two technologies, called Optical Character Recognition (OCR) and Intelligent Character Recognition (ICR), either separately or in concert with one another. Both are types of software that take information on a document that has been digitally rendered and translates that document into a language that the computer can understand. In essence, OCR and ICR are computer programs that act as a translator for written human communication. The primary differences between OCR and ICR are what each is capable of reading. Optical Character Recognition programs are only capable of reading characters created using a printer or type writer. Intelligent Character Recognition is capable of reading handwriting. There are limitations of course; for instance, neither ICR nor OCR will read characters rendered in script font such as the Cyrillic alphabet or cursive handwriting, also they would have a difficult time reading a free form letter, but on standard forms and correspondence, these technologies are highly effective.

Here’s how it works, you take a document that you would like to input into your data management system and you have your computer capture an image of the document using a scanner. You then send that image to your ICR/OCR program. The ICR/OCR software overlays that image with a grid (think graphing paper) and maps out the whole sheet, then it compares the image that appears in each square on the grid against a database of characters that it was programmed with. If the computer is unable to create matches for your characters, it generates an error and lets an operator know that the document will have to be processed manually. The software takes the images that it is able to read and imports it into your data management system, where it is filed digitally.

So how can you use this technology to streamline your data entry processes? This is pretty simple, by employing ICR/OCR software you can feed incoming communications into the program, set it so that one of your data entry professionals reviews the computer’s work for accuracy, and then allow the program to send a copy to your data management system for digital filing and processing. For images that the computer is able to translate, the only time your data entry personnel have to touch that piece of data is when they approve it. In a traditional system, data entry personnel would have to, at bare minimum, enter the data, verify that it was entered correctly, and then file the information. If you have a 100 forms, that equals a minimum of 300 tasks for that batch of forms, but with an ICR/OCR program that is able to read 80 of those forms, you have reduced the number of tasks to 140. If each tasks takes an average of thirty minutes, with a data entry clerk making $12.86/hr, in a traditional system you are looking at a processing cost of $1,929 per hundred forms, solely in man hours. Using an ICR/OCR system you would spend only $900 on processing man hours, a difference in savings of of $1,029 per one hundred forms. Of course, this is a very simplified model; your actual savings would vary based on the rate you pay your data entry clerks, the number of tasks required for each piece of data, their average time per task, and the number of forms your system can interpret, but you can see from this exercise that the potential savings can be enormous.

But, if the software doesn’t do all the work what’s the point? Allowing a computer to do the bulk of the manual processing takes less time than inputting the data manually; freeing your employees to do more important things. Furthermore, it will also increase the rate at which data is processed, and you can see from my previous illustration how the increased speed in processing would result in fewer man hours and thus a significant cost savings. It also has the added advantage of decreasing the processing time for payment receipt; for instance if you are processing mail from your payment center and the average speed to process that is 3 days you can easily decrease that processing time by half or more. Another advantage is that OCR and ICR don’t just take images that you scan; you can also use ICR/OCR to automatically input the information coming in through your fax and email system. This is accomplished by assigning an email address and/or fax number to the ICR/OCR program, then faxes and emails can be routed directly to the software, where software would perform the work of translation. This will reduce paper usage and further increase the speed of data processing and cost savings.

There are some important things to know here. First, ICR/OCR programs are NOT sentient robots! This means that you are still going to need your data entry staff, their job functions will change though. Instead of spending hours typing in data they will spend time reviewing what the system has read and making corrections as necessary. Also, there will be times when the software is unable to read the document meaning that some documents will still require manual processing, just a lot fewer of them. With the smaller workload you are looking at significant cost savings and having your data entry staff freed up to perform other tasks. Overall, you are looking at significant return on investment in both time and cost on any ICR/OCR integrations that you invest in. For more information on how you can integrate ICR/OCR software into your business processes contact us.

2 thoughts on “Reducing Inefficiencies: Using ICR and OCR to Streamline Business Processes

  1. Tom   said:

    For OCR and form recognition my company is using SmartOCR SDK. It is
    not as expensive as other optical character recognition kits and works very

  2. website   said:

    I’ve found a really good ocr app which changes photos to doc files. It works well compared to lots of the other apps that do this.

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