How Optical Character Recognition Algorithms Redefine Enterprise Processes



Coming into information and shifting it from one place to a different is a time-consuming, repetitive activity. One worker can simply spend as much as three hours a day simply shifting information round. Along with consuming up workers’ time, guide information dealing with is vulnerable to errors, which result in income losses. 

A report by Dun & Bradstreet, investigating the previous and way forward for information, revealed that one in 5 companies lose cash because of incomplete information. Optical character recognition (OCR) expertise can assist companies resolve these points. OCR algorithms can remodel paper-based paperwork to editable searchable textual content. 

They’ll additionally extract data from information and enter it into the corresponding fields in a company’s IT techniques. So, how does OCR work? How can this expertise assist you to obtain enterprise targets? And do you have to contact an synthetic intelligence options supplier that can assist you construct and arrange OCR software program?

What’s optical character recognition, and the way it works

OCR definition

Optical character recognition is a expertise that converts typed or handwritten textual content and printed photos containing textual content into machine-readable digital information format. OCR algorithms assist flip massive quantities of paper paperwork into digital information, facilitating textual content storage, processing, and looking out.


OCR techniques include {hardware} and software program. The {hardware} half could be an optical scanner or the same machine that may convert paper paperwork to the digital format. The software program half is the OCR algorithm itself.

How does OCR work?

It’s exhausting for computer systems to acknowledge characters due to the completely different fonts and variations on how one letter could be written. Handwritten letters complicate issues even additional. However, optical character recognition algorithms tackle this problem. Each OCR answer operates in 4 most important steps:

Picture acquisition

The method entails utilizing an optical scanner to seize a digital copy of the paper doc. The doc must be correctly aligned and sized.


The purpose of this part is to make the enter file usable by the OCR algorithm. The noise and background are eradicated. Pre-processing consists of the next steps:

  • Structure evaluation: figuring out captions, columns, and graphs as blocks
  • De-skew: tilting the digital doc to make traces horizontal in case if it wasn’t correctly aligned throughout scanning


  • Picture refinement: smoothing the perimeters, eradicating mud particles, rising distinction between textual content and background
  • Textual content detection: some algorithms detect separate phrases and divide them into letters whereas others work with textual content straight with out splitting it into characters.


  • Binarization: changing the scanned doc into black and white format, the place darkish areas symbolize characters (alphabetic or numeric) and white areas are recognized as background. This step helps to acknowledge completely different fonts.

Character detection

Throughout this part, optical character recognition algorithms carry out completely different manipulations to acknowledge letters and numbers. There are two most important approaches:

  • Sample recognition: OCR algorithms are educated on all kinds of fonts, textual content codecs, and handwriting kinds to match distinct characters from the enter file to what they’ve realized.

  • Characteristic recognition: some algorithms profit from identified character properties, comparable to crossed and curved traces, to establish characters in enter information. For instance, a letter “H†is recognized as two vertical traces and one crossing horizontal line. OCR algorithms powered by neural networks (NN) use a unique logic the place the primary NN layers mixture pixels from the enter file to create a low-level characteristic map of the picture.

After detecting characters, this system converts them to American Normal Code for Info Alternate (ASCII) to facilitate additional manipulations.


The output could be primary like a personality string or a file. Extra superior OCR options can retain the unique web page construction and create a PDF file with searchable textual content. Though there are not any instruments to this point that may assure 100% accuracy on completely different enter information, some optical character recognition algorithms can obtain a formidable accuracy of 99.8% on acquainted texts. Utilizing handwriting will considerably compromise the outcomes. Additionally, it’s vital to know that with poor coaching or unfamiliar texts the error fee could be as excessive as 20%. Therefore, it’s needed for customers to always monitor, proofread, and proper OCR algorithms’ output, particularly when a brand new sort of paperwork enters the pipeline. 

Submit-processing part also can contain pure language processing (NLP) and different AI methods for information verification. AI can’t solely right the textual content but in addition catch errors in calculations. Let’s assume that whereas processing an bill, an OCR algorithm recognized the full sum to be $500. AI can confirm this by including all of the bills and determining that they don’t quantity to $500. AI can notify a human worker to assessment this specific case. 

If you wish to enhance the algorithm’s high quality, you may experiment with open-source OCR libraries, comparable to Tesseract, that use their very own dictionary for character segmentation. One other strategy is to create a specialised glossary of phrases reoccurring in your area. Additionally, reviewers can use their suggestions as an enter to a different optical character recognition algorithm coaching session.

How can OCR algorithms profit your online business?

Here’s what optical character recognition options can do for you:

  • Reduce down prices: changing information to the digital format and automating information entry reduces prices when it comes to worker hours
  • Improve buyer satisfaction: this expertise will allow folks to replace their private data remotely by scanning identification paperwork as an alternative of bodily visiting a financial institution or some other institution
  • Supply cheaper backup choices: there isn’t a must retailer paper-based paperwork along with their duplicates and triplicates, which consumes costly bodily storage items
  • Facilitate translation amongst completely different languages: some OCR instruments have the power to translate paperwork from one language into one other
  • Automate workflows: looking out by digital information with a very good administration system in place is quicker than coping with paper paperwork. Much less processes shall be placed on maintain whereas searching for a misplaced bodily file. If you’re considering a extra complete automation answer, you may make the most of clever course of automation providers that embrace OCR and different superior capabilities.

OCR options obtainable on the market

If you’re eager about incorporating OCR options into your IT techniques, you’ve bought a number of choices to select from.

Open-source optical character recognition algorithms

There are a number of open-source OCR algorithms that companies can adapt to their wants. These options are simpler to customise as their supply code is universally accessible. Nevertheless, there isn’t a central authority. Builders of open-source options don’t assume accountability and don’t provide additional assist. Therefore, the code’s high quality could be questionable. This feature is extra appropriate for firms with sturdy IT departments able to fixing any malfunctioning. Alternatively, you may attain out to machine studying consultants who can customise and retrain this software program for you. 

Listed here are some generally used open-source OCR options:


Tesseract open-source engine is without doubt one of the hottest OCR instruments, and it’s believed to be among the many most correct free instruments. It was developed by Hewlett-Packard between 1985 and 1994. Ranging from 2006, this platform was managed and additional developed by Google. Tesseract is written in C++ but it surely provides wrappers in Java, Python, Swift, Ruby, and R, and some extra frequent programming languages. 

The instrument operates utilizing a command line and doesn’t have a graphical person interface. Nevertheless, there are a number of GUI choices you can deploy to make this answer person pleasant. One instance is glmageReader. This interface is developed utilizing Python and helps completely different picture codecs, together with PNG, GIF, and PNM.


Tesseract doesn’t provide web page format evaluation, doesn’t format the output, and its command line interface requires all photos to be submitted in TIFF format. Moreover, this OCR answer shouldn’t be optimized for GPU and doesn’t enable batch processing.

Tesseract’s command line interface


OCRopus was initially written in Python and now has a separate C++ model. It’s supported by Google and was used as an OCR engine for Google ReCaptcha algorithm.


OCRopus has three most important options:

  • Bodily format evaluation: identifies textual content blocks, columns, and features and determines the studying order. For instance, to detect columns, it makes use of a maximal whitespace rectangle algorithm to detect white areas between columns.
  • Line recognition: acknowledges traces inside every block or column, whether or not they’re vertical or left-to-right traces.
  • Statistical language modeling: makes use of dictionaries and stochastic grammar to resolve the issue of lacking and unidentified letters.


Jaided AI, an optical character recognition firm, constructed EasyOCR package deal utilizing Python and PyTorch library with its deep studying fashions. It helps over 80 languages together with Cyrillic scripts, Chinese language, and Arabic, and this base retains increasing. As part of the implementation roadmap, there are plans so as to add configurable choices for recognizing handwritten textual content.


Industrial OCR options

Software program as a service (SaaS) options permit you to profit from high-quality algorithms and obtain full vendor assist. Relying on the chosen platform, you would possibly be capable of retrain the OCR algorithm in your dataset and even additional adapt it to your distinctive wants.

Amazon Textract

Amazon Textract is a machine learning-based service that extracts printed and handwritten textual content from scanned paperwork. It may possibly work with unstructured information and with formatted textual content, comparable to kinds and tables. The answer makes use of AI and doesn’t want any further configuration steps or templates. This service is safe and compliant with information safety rules, such HIPAA and GDPR. Amazon Textract provides 4 APIs that clients can use and pay for accordingly:

  • Detect doc textual content API: extracts unstructured printed textual content and handwriting from scans. Prices $0.0015 per web page for the primary a million pages; afterwards, the value decreases.
  • Analyze doc API: works with structured information. Extracts textual content from kinds and tables. Shoppers pays $0.015 per web page when processing tables, and $0.05 per web page within the case of kinds. The worth decreases after the primary million pages.
  • Analyze expense API: works with invoices. This service has a standard taxonomy of receipt-related fields. For instance, it could actually acknowledge bill quantity. Customers pays $0.01 per web page for the primary million pages.
  • Analyze ID API: understands the context of identification paperwork, comparable to driver’s licenses and passports, and might extract textual content from particular fields. You possibly can profit from this service for $0.025 for the primary 100,000 pages.

Google Cloud Imaginative and prescient

Google provides Imaginative and prescient API, which may extract printed and handwritten textual content from paperwork and pictures. It incorporates two options for optical character recognition:

  • Text_detection: extracts textual content from photos, like pictures of visitors indicators
  • Document_text_detection: captures texts in paperwork and pictures. It differs from the earlier characteristic as its response is optimized for dense texts.

Each options enable customers to course of the primary 1,000 items per 30 days without cost. After that, you’ll pay $1.5 per every 1,000 items. This worth will lower as you submit extra items per 30 days.

Microsoft Azure Computer Imaginative and prescient

Microsoft provides OCR providers as part of its generic laptop imaginative and prescient API, not as a stand-alone characteristic. So, you pay for the entire package deal, which, along with optical character recognition, consists of identification of celebrities, landmarks, manufacturers, and normal object detection. This API will price you $1 per 1,000 transactions for the primary million items. Afterwards, the value decreases to $0.65 per 1,000 transactions, and can preserve declining as you submit extra content material.

High OCR use circumstances in several industries

Optical character recognition algorithms are gaining traction in several industries. Beneath are a number of the most distinguished OCR purposes.

OCR in banking

Banking establishments use a great deal of paper-based paperwork of their workflows. These embrace cheques, buyer information, mortgage purposes, financial institution statements, and so on. Adopting OCR recognition algorithms permits staff to retailer and entry all these paperwork digitally and prevents paperwork loss and injury. 

Examine handling 

One instance of OCR on this sector is utilizing banking apps to deposit paper-based checks digitally. These options deploy optical character recognition algorithms to establish related fields in checks and carry out operations accordingly with out the necessity for an worker to switch all this information manually. Moreover, such apps can carry out signature validation in opposition to the present database and clear the test instantly. 

Buyer onboarding 

As a substitute of getting an worker confirm clients’ identification manually, OCR-powered options can extract and validate all related data from the individual’s passport and different ID paperwork. This permits for immediate verification and improves buyer expertise. 

Shopper data updating 

As a substitute of getting to go to or name a financial institution, with the assistance of OCR, shoppers can scan their paperwork to replace data robotically. For instance, Alfa-Financial institution collaborated with Sensible Engines to reinforce their banking app with optical character recognition capabilities. With this new characteristic, clients can place ID paperwork in entrance of their smartphone’s cameras, verify the extracted information, and replace their data within the banking system.

OCR in healthcare

Much like the banking sector, healthcare organizations accumulate many paper paperwork, comparable to X-ray scans, take a look at outcomes, therapy plans, and so forth. OCR algorithms assist digitize these information to forestall lack of bodily paperwork and cut back efforts wasted on dealing with paper information manually. Moreover, some OCR options that acknowledge handwritten textual content can course of affected person enrollment papers and prescriptions. 

Medical claims system 

There are software program distributors who concentrate on OCR-enabled medical declare processing. One such firm is OCR Options. It developed a product that may scan, confirm, and appropriately route medical claims for additional dealing with. This program is educated and configured to work with frequent codecs, comparable to Dental Declare Kinds and CMS-1500, amongst others. 


Many medical services nonetheless depend on fax. Optical character recognition options can convert incoming materials into accessible digitally saved format. 


OCR-powered options assist healthcare organizations digitize invoices and file them appropriately. One OCR instance comes from San Francisco-based Nanonets, which provides an OCR-powered answer that makes a speciality of bill processing. The corporate claims its software program will cut back bill information entry time from three minutes per bill to only 30 seconds.


OCR in retail

Optical character recognition algorithms allow retail staff to save lots of time on processing buy orders, invoices, packing lists, and different paperwork. These options also can extract serial numbers from products’ barcodes and allow clients to scan their vouchers and extract serial codes. 

ID scanning 

Retailer staff might must scan private data for a lot of causes, comparable to age verification, filling data for buyer loyalty, and extra. OCR distributors capitalize on this chance. 

As an example, OCR Options, based mostly in Florida, developed idMax, an OCR-powered software program that may scan ID paperwork, extract related fields, and populate the retailer’s database with corresponding data. idMax could be put in domestically or accessed by the cloud.

Challenges of adopting an OCR answer in your enterprise

For those who determined to deploy OCR recognition algorithms to enhance your operations, there are a number of facets that it is advisable to take into account:

  • Enter materials: ensure that all enter information are appropriate for the OCR algorithm. For instance, the information must be free of harm that may intervene with the algorithm’s capacity to acknowledge its content material. The distinction is excessive sufficient, the pages are correctly aligned, and so on. Some algorithms have highly effective pre-processing capabilities and might resolve a few of these points for you. But when this isn’t the case, perhaps it’s a good suggestion to spend money on a high-quality scanner and guarantee correct web page alignment.
  • Coaching dataset: when you determine to coach or retrain optical character recognition algorithms, it is advisable to ensure that the information you intend to make use of faithfully represents your enter materials and incorporates sufficient right annotations. In case your coaching dataset is simply too small, or doesn’t include ample annotations, the algorithm is not going to produce desired outcomes. Additionally, throughout coaching, it is advisable to pay particular consideration to comparable characters/symbols. For instance, numbers 2 and seven might look relatively comparable, particularly if the algorithm is anticipated to work with handwritten textual content. Knowledge scientists must cowl such distinctions within the coaching information. One other instance could be utilizing OCR algorithms to detect and seize license plates on automobiles. You have to ensure that your algorithm doesn’t go for a customized sticker with textual content on the again of a automobile mistaking it for a license plate.
  • Handwritten textual content: with handwriting come quite a few further OCR challenges. There’s a massive number of writing kinds between completely different folks, even particular person user’s writing could be inconsistent. Gathering a dependable consultant coaching dataset is a problem as it is advisable to account for all of the completely different kinds. Cursive handwriting is especially difficult to course of. Additionally, whereas printed textual content is available in a straight line, handwriting tends to have variable rotations, which complicates issues much more.
  • Scaling: when you improve the variety of customers or the variety of requests per time slot, the system can collapse, particularly in case you are utilizing an open-source answer and relying by yourself computing energy. In case of business OCR merchandise that run within the cloud, you may prepare and pay for extra capability.
  • OCR algorithm’s efficiency monitoring: after deployment, the algorithm’s efficiency would possibly begin degrading because of various factors. One instance is the change in distribution between the coaching information and the precise manufacturing information. This happens when the mannequin begins engaged on datasets it wasn’t ready for, comparable to completely different fonts or characters with uncommon inclines. These modifications will have an effect on the model’s output over time, and it is advisable to detect these points and retrain the mannequin accordingly to keep up its preliminary accuracy degree.

To sum up

Optical character recognition algorithms have the potential to hurry up your online business processes. Nevertheless, there are related challenges to think about. The chosen algorithm is prone to want retraining, and it’s a tedious activity to correctly annotate a big dataset. You additionally want to consider potential scaling as your online business expands. 

Adopting an open-source answer appears tempting worth smart but it surely comes with its disadvantages, comparable to lack of assist and updates, which may open safety loopholes. Industrial options are extra dependable on this regard however could be expensive and exhausting to customise. 

If you’re not sure of the right way to proceed and which OCR answer is one of the best match for your online business, don’t hesitate to succeed in out. At ITRex, we shall be pleased to conduct a radical analysis of your online business wants to find out one of the best OCR choice. We are able to additionally assist you to retrain the chosen answer and combine it into your system. We are able to additionally construct a customized OCR algorithm, if wanted.Â

Do you need to pace up your operations with optical character recognition? Drop ITRex a line! Their AI specialists will help you with OCR answer integration and coaching. They’ll additionally develop customized algorithms for you, if wanted. 

The publish How Optical Character Recognition Algorithms Redefine Enterprise Processes appeared first on Datafloq.



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