January 9, 2023

Why your existing OCR technology is no longer enough to stay competitive.

By Shane Reid

Optical Character Recognition (OCR) has been a mainstay in business for decades now. Over that time, it has revolutionised document capture and information management, saving businesses millions in time, money and resources. And it’s still going strong.

The OCR industry itself was worth USD$8.93 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 15.4% through to 2030.

So, given its enduring success and continued market growth, why is it time to review your existing OCR technology solution?

While OCR has served businesses well, there are two main limitations. OCR struggles with unstructured data, such as handwriting. And it can’t pull context from scanned information, hindering end-to-end document automation.

As technology advances and artificial intelligence gains ground, these limitations are becoming more evident. It’s now clear that some businesses are no longer getting the most from their OCR investment.

This doesn't mean it’s time to get rid of OCR altogether. Instead, it’s time to review your use of OCR technology and assess whether it is still the best choice for your business.

The evolution of OCR

If it seems like OCR has been around forever, you’d be right as OCR technology has existed for more than a century. First invented by physicist Emanuel Goldberg in 1914, the first OCR machine read characters and converted them into telegraph code.

It didn't take long for the idea to catch on with others.

Following WWI, Gustav Tauschek’s ‘Reading Machine’ matched templates with a photodetector to detect letters on a picture. After the Second World War, David Shepard went further with ‘Gismo’ which recognised all letters of the alphabet produced by a typewriter.

Fast forward 20 years and Ray Kurzweil created software that could recognise text printed in virtually any font. This first omni-font OCR system paved the way for what we recognise today as modern OCR technology.

While the first iterations of OCR didn’t bear a lot of resemblance to modern use cases, the underlying principle has never changed. OCR has always been about taking information from images, text and other sources and converting it into a machine-readable format.

Advantages of OCR technology

There are good reasons why OCR is still the technology of choice for so many businesses around the world.

  • Accuracy - flatbed OCR scanners are accurate and produce good quality images.
  • Speed - OCR scanning is fast with large quantities of text processed quickly.
  • Cost - OCR scanning is cheaper than paying staff to input data manually.
  • Convenience - OCR converts paper documents into electronic forms for action.
  • Efficiency - harnessing OCR speeds up document processing and saves on labour.

In information-heavy companies, OCR has transformed everyday business operations and paved the way for greater efficiency.

Limitations of OCR technology

While the advantages of OCR are obvious, there are growing limitations emerging in legacy systems.

  • Template-based - OCR struggles with unstructured text formats.
  • Handwriting - legacy OCR systems have trouble accurately scanning handwriting.
  • Quality - final image quality is dependent on the quality of the original OCR scan.
  • Exceptions - OCR scanning issues need to be manually assessed and corrected.
  • Context - OCR technology can’t pull context, label or classify scanned images.

In an era of automation and integration, the limitations of legacy OCR technology are beginning to stop some businesses from making the most of newer AI-powered technologies.

The move to next-level OCR technology

With legacy OCR technology starting to show its age, what’s the alternative for businesses looking to make the most of their valuable data?

Intelligent Document Processing (IDP) is an alternative approach that harnesses the advantages of OCR technology while addressing its limitations.

This next-level technology uses OCR to convert image or text into a machine-readable format. IDP then leverages AI, ML and deep learning to capture, classify and extract structured and unstructured data, creating a fully automated document processing workflow.

Building on OCR’s legacy, IDP takes document processing to another level. OCR made it possible to businesses to capture and digitise large amounts of data. IDP leverages AI and automation to harness the true power of this data to give your business the edge.

Simply put, IDP offers a path toward automated document processing, capturing more accurate data while providing more context. Not only does this pave the way for end-to-end automation, it also provides businesses with invaluable insights to promote future growth.

Why you need IDP to remain competitive

The short answer? AI represents the future of business. OCR can only do so much. Making the move to IDP will not only give you all the advantages of OCR. It will also give you access to a range of automation benefits that will help you stay ahead of the competition.

  • Increased productivity through end-to-end workflow automation.
  • Faster document retrieval via automated classification and indexing.
  • Increased accuracy thanks to AI-assisted data extraction tools.
  • Reduced manual effort reflected in fewer exceptions requiring intervention.
  • Improved process efficiency resulting in faster and smoother interactions.
  • Enhanced compliance with greater document visibility and data accuracy.
  • Better customer experiences thanks to frictionless business processes.
  • Heightened security through tighter management of sensitive documentation.
  • Greater agility and flexibility with the help of custom workflows.

Switching to IDP doesn’t mean a total technology overhaul

If your business is not getting the most out of your OCR investment, making the switch to IDP doesn’t mean you have to start over from scratch. With OCR already a key component of IDP, it’s easy to add on next-level technologies, like AI, to your existing system.

Working with a leading IDP provider, like Hyperscience, it’s easy to seamlessly integrate advanced solutions within your existing OCR technology to improve data extraction, validation and exceptions management.

Saving the cost, inconvenience and buy-in of moving to a new system, you avoid expensive hardware purchases and unnecessary downtime while continuing to draw on the experience of your existing IT team.

Incorporating IDP with legacy OCR technology gives you all the benefits of OCR and IDP without throwing away your existing technology investment.

Whichever way you look at it, it’s a good deal.

Enhance OCR technology with Umlauts Automation Platform

Umlaut are leaders in streamlining processes for finance and insurance firms. We build on your current technology stack to deliver seamlessly integrated solutions to unlock a range of time and cost savings for your business.

By harnessing our powerful automation platform, we enhance legacy OCR systems with an IDP upgrade that delivers:

  • customisable output accuracy levels
  • support for multiple document types
  • document classification & separation
  • RPA integrations
  • accurate data extraction from poor-quality documents without image cleanup
  • machine learning to improve the entire dataset
  • dynamic thresholding for human review
  • quality assurance mechanism.

Leveraging the power of AI, ML and deep learning, our automation platform connects the dots for your business, taking document processing to the next level.

Shane Reid


I’m driven by finding superior solutions to my client’s data challenges and helping them unlock their growth potential through automation. I have 21 years of experience in ICT, general management and sales director roles. I love uncovering the best means of addressing each client’s issues and determining how they will be integrated to deliver optimum outcomes.

Schedule a free consultation with Shane to to find out how your business can take advantage of automation.

book a consult