Optical Character Recognition (OCR) Defined: What It Is and How It Works

Going paperless in today’s world has many benefits for businesses, but making the transition from paper to digital is not always easy. The most complicated part of this process is transferring physical paperwork into files that can be easily edited and searched.

Scanning companies use a software application called Optical character recognition (OCR) to convert digital images into text documents. These documents become active records that can be altered and updated at any time.

What Is Optical Character Recognition?

Optical character recognition (OCR) is one of the most commonly used types of data entry methods. OCR recognizes text within a digital image and converts hard copy documents into electronic files. The text is scanned, analyzed, and translated into machine-encoded text can then be easily searched and edited electronically.

OCR and Digitizing

Scanning documents is the first step in transforming physical documents into a digital format. Document scanning creates an image of your paper document and converts it to a digital file. Digital copies save storage space and increase accessibility.

Digitizing builds on scanning through the use of additional tools that make digital files active documents rather than static images. OCR is an extension of scanning that makes documents more usable by creating editable text.

Additional digitizing tools include:

  • Document Redaction Systems: Secure, permanent redaction processes that protect sensitive information.
  • Automated Retention Tracking: Files are organized to track their legal retention periods to avoid noncompliance, penalties, or fines.

How does OCR Apply to Your Business?

Scanning to Cloud

Thousands of organizations worldwide rely on OCR to capture and process data from business documents. You can apply OCR to your business to:

  • Improve Digital Storage: Moving your documents to the cloud makes them accessible for employees anywhere, at any time.
  • Reduce Human Error: Automation of documents ensures accuracy and creates easy tracking and storage.
  • Expedite Workflow: Converting documents to searchable PDF files enables you to find keywords, names, and phrases that can help you locate information quickly and efficiently.
  • Aid Compliance: Creating secure, controlled access to private information helps you stay in compliance with privacy laws.
  • Evolve Your Business: Paperless, organized documents help your business evolve with technology and modern needs.

How OCR Works

OCR works by recognizing text, identifying each character, and then “reading” through your document word by word and line by line. The process takes place in the following steps:

  1. Printout Quality: Accuracy increases when you use the best possible printout of your document. Low contrast, folds, and stains reduce the probability of correct letter and word recognition.
  2. Optical Scanning: OCR works best with sheet-fed scanners because you can scan pages one after another. You can also use a digital camera with a macro focus setting to capture clear letter images.
  3. Two-color Process: OCR generates a black and white image to read. It recognizes black as characters to be identified and white as the background. Stains over words may confuse the OCR process.
  4. Pattern and Feature Detection: Letters, numbers, and symbols are recognized by detecting individual lines, strokes, and features (angled lines, crossed lines, curves, etc.) from which a character is made. Each character is processed creating a word, then a line, then your entire document almost instantaneously.
  5. Basic Error Correction: OCR reviews the entire document and highlights possible misspelled words and misrecognitions, giving you a chance to correct any mistakes.
  6. Layout Analysis: Complex layouts are detected and can turn images into graphics, tables into graphs, and splits columns correctly.
  7. Proofreading: OCR technology is nothing short of amazing, but it still cannot replace the human brain. The final step in this process is old fashioned proofreading.

Functionalities of OCR

Many businesses use optical character recognition technology because of the functionality it creates within your documents. With OCR you can now:

  • Edit: The ability to edit scanned documents is a great help when content is constantly changing and needs to be updated.
  • Search: Digitized documents are text searchable. You can easily find specific words on a page or lookup names and numbers in an instant.
  • Increase Accuracy: Automated data entry tools reduce errors and inaccuracies.

Benefits of Optical Character Recognition (OCR)

Optical character recognition helps businesses by increasing effectiveness and efficiency in the workplace. Here are the top benefits of OCR based data entry:

  • Cost Reduction: Data extraction becomes quick and easy, saving money on manpower. OCR also reduces costs like printing, copying, and shipping.
  • Increase Productivity: Fast data retrieval allows employees more time to focus the on task at hand.
  • Storage Space: Electronic formats free up work space in your office.
  • Ready Availability: Data can be made available in many places and just a click away.
  • Security: Paper documents can be lost, stolen, or destroyed. Digital documents are protected and access can be limited to avoid mishandling of digitized data.
  • Disaster Recovery: When your data is stored on secured servers, it remains safe even in the most extreme situations.

Get Free Quotes on Customized Document OCR Scanning Services

Transitioning to a paperless office or document management system is possible with our network of knowledgeable scanning service professionals.

Shred Nations offers free, no obligation quotes through our nationwide network of scanning service providers. To get started, fill out the form to the right, give us a call at (800) 747-3365, or contact us directly with our live chat. In just minutes, you will receive personalized quotes from top professionals in your area.