Intelligent Document Processing (IDP) is an emerging technology experiencing rapid growth, transforming how businesses manage documents in ways that surpass the capabilities of older, standalone technologies like OCR (Optical Character Recognition).
IDP utilizes artificial intelligence (AI) and machine learning (ML) to automate data extraction from diverse document formats, addressing the persistent challenges in achieving a fully paperless office. This encompasses a wide range of digital document types such as PDFs, scanned images, emails, chat messages, and even audio/video files. It effectively handles various essential business documents, including invoices, contracts, and purchase orders.
Benefits of IDP
IDP offers several benefits for businesses of all sizes, including:
- Increased efficiency
IDP, coupled with Intelligent Automation, can automate time-consuming and repetitive manual tasks, such as data entry and document review. This frees employees to focus on more strategic and value-added activities and allows for much greater volumes of business to be handled without increased staff costs.
- Improved accuracy
IDP is overwhelmingly more accurate than manual data entry, which eliminates errors and improves the quality of business processes. Perhaps most importantly, IDP knows what it isn’t sure of – it never makes errors and always requests human validation if the ML “confidence score” is below a certain threshold (that you can control). Interestingly, this is also part of a solution to a Customer Master Data Management challenge: many customer records with different spellings and phrasings of a customer name. IDP always gets it right.
- Enhanced compliance
IDP can help businesses to comply with complex regulatory requirements by automating the processing of sensitive data, and ensuring it is captured in a timely way. Best of all, everything is tracked, logged and able to be audited on demand without any extra effort. We call this “Continuous Compliance”.
- Reduced costs
IDP helps businesses reduce costs associated with document processing such as labor, printing, and storage. What is surprising is that some businesses don’t realize how painful and expensive these things are for them because they gave up on doing it themselves and outsourced it to another company years ago. Lydonia routinely helps customers bring these operations back in-house using automation at about a tenth, or less, of the cost of their current outsourcing contracts.
- Better client communication
Today's IDP and AI technology effortlessly reads and comprehends various communication formats, such as: emails, attachments, texts, tweets, chat messages, phone calls, and support tickets, enabling immediate understanding. This capability allows for real-time issue resolution, prompt client responses, and swift action on their requests, distinguishing a business in the market while fostering customer retention and satisfaction. Furthermore, it provides an opportunity for cross-selling and upselling at the point of contact by subtly introducing products or services relevant to customers' inquiries.
- Faster payment processing
Whether it's expediting billing processes and reducing Days Sales Outstanding through the implementation of IDP and AI, or effortlessly ensuring timely payment by eliminating the need for manual invoice reviews, IDP stands as a transformative force. Lydonia clients enjoy the newfound capability to negotiate more favorable contract terms with vendors, courtesy of accelerated payments facilitated by IDP. Additionally, IDP effectively addresses the widespread issue of manual payment processing falling short of meeting contractual obligations promptly, often leading to credit hold actions.
What is IDP?
IDP is a set of technologies that use AI and ML, including enhancements from Generative AI (Like Open.AI and Google’s Vertex.AI) to automate the processing of documents. IDP solutions can extract specific clauses or terms within contracts, or any key data from documents, such as names, dates, addresses, and amounts. This data can then be used to populate databases, generate reports, and trigger automated workflows.
IDP solutions typically use a combination of the following technologies:
- Scanned images of documents, audio files, PDF files, etc. are digitized, transcribed, and converted into text.
- Natural language processing (NLP): NLP is used to understand the meaning of text.
- Generative AI is used to augment NLP & summarize document content.
- Machine learning: ML is used with trained, context-aware IDP ML models to identify and extract key data from documents.
How does IDP work?
The first step in the IDP process is to classify the document. This involves identifying the type of document, such as an invoice, contract, or purchase order. Once the document has been classified, the IDP solution can begin extracting key data.
The IDP solution will use a combination of AI, NLP, and ML to identify and extract key data from the document. For example, the IDP solution might use an invoice-aware ML model to reliably extract the vendor name, invoice number, and total amount from an invoice – even if it has never seen a particular vendor before, or the invoice is in a new and different format.
Once the key data has been extracted, the IDP solution can output the data in a variety of formats, such as CSV, XML, or JSON. The data can then be used to populate databases, generate reports, and trigger automation workflows. This last use is the most common – IDP typically feeds Intelligent Automation workflows that post invoices, update customer records, etc.
Use cases for IDP
IDP can be used to automate a wide variety of document processing tasks, including, but by no means limited to:
- Invoice processing
- Contract review
- Purchase order processing
- Insurance claims processing
- Loan application processing
- Human resources onboarding
- Customer support
IDP Implementation
There are a number of different ways to implement IDP, and Lydonia Technologies can assist.
If you are considering implementing IDP, there are a few things to think about:
- Requirements: Identify your needs. What types of documents do you need to process? What is the annual volume of documents? What data do you need to extract from the documents?
- Value: Identify the business metrics and define the business case. What does Business as Usual (BAU) cost today? What benefits might you obtain beyond just cost savings?
- Implementation: When would you implement the IDP solution? How long will it take to do so? Who needs to be involved? This includes configuring & testing the solution, training your employees, and integrating the solution with your existing systems.
Conclusion
IDP is a powerful technology that can help businesses improve efficiency, accuracy, and compliance of their document processing operations. If you are looking for a way to transform your document management process, IDP is a great option to consider.