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What Intelligent Document Processing Is and Why You Need It

We live in the age of big data. According to IBM, the ongoing explosion of data resulted in some 40 trillion gigabytes being used in 2020 alone. This amounts to 1.7 megabytes of data created every second for every single person on earth. For organizations, the age of big data carries many costs. The same IBM article states that companies spend a combined $55 billion per year just to store data copies.

And then there are the costs of processing documents and converting data into usable form. According to Forbes, as much as 90% of all data is unstructured. Unstructured data includes information such as emails, texts, photos, webpages, and open-ended survey responses. Since almost all data generated is unstructured data, it is crucial for organizations to find efficient ways to manage and analyze this information to make informed business decisions.

To overcome these challenges, many companies are turning to automation technologies. And one of the most important and widely used solutions is Intelligent Document Processing (IDP).

What is Intelligent Document Processing (IDP)?

Intelligent Document Processing, also referred to as Intelligent Document Capture or Cognitive Data Processing, is a solution that automatically captures and processes data from various document formats. IDP utilizes several technologies to extract and categorize unstructured data sources. These include Artificial Intelligence (AI), Machine Learning (ML), Optical Character Recognition (OCR), and Intelligent Character Recognition technologies.

Deloitte defines IDP as a solution that “automates the processing of data contained in documents – understanding what the document is about, what information it contains, extracting that information and sending it to the right place.”

Important Things to Consider Before Implementing an IDP

There are several things to consider prior to deploying an IDP solution. The first is the technology that you will use to extract the data from documents. Structured data sources tend to require less sophisticated technology than unstructured sources.

The second thing to consider is document formats. Most companies encounter a broad range of document types on a daily basis. For instance, paper documents, emails, Microsoft Word and Excel files, and PDFs. It is important to consider the full range of document formats that you will process to visualize and plan your workflows.

How Intelligent Document Processing Works

There are many different types of IDPs and a potentially unlimited number of use cases. But as a general matter, every IDP has several key steps.


Documents enter into an IDP workflow in various conditions. The solution uses technology to improve image quality such as noise reduction and binarization. Through computer vision, the IDP can identify the structure of a document including features like text and pictures.

An IDP leverages recognition technologies to extract data from the document. This includes Optical Character Recognition (OCR). Wikipedia defines OCR as the “electronic or mechanical conversion of images of typed, handwritten or printed text into machine-encoded text, whether from a scanned document, a photo of a document, a scene photo…or from subtitle text superimposed on an image.”

Some other recognition technologies that are used during this step include Intelligent ChIllinois software development companyaracter Recognition (ICR), Optical Mark Recognition (OMR), and Barcode Recognition.


An IDP uses Machine Learning (ML) and Natural Language Processing (NLP) to identify, separate, and classify the various components of documents. The system categorizes these different components and automatically sends them to their predefined destinations.


An IDP uses databases to validate data that is extracted from documents. This improves data quality and ensures that data is in the right format for its intended end-use. Humans often work alongside an IDP, allowing problematic data to be routed to them to review and remedy. Through this process, the IDP continues to learn and improve its accuracy over time.


We mentioned above the importance of considering how the types of documents and data that you will be working with fit into your organization’s workflows. This is because the final step of an IDP involves integrating the information into your business processes for immediate consumption. Carefully mapping out the flow of data improves efficiency and avoids bottlenecks in your workflows.

Intelligent Document Processing Benefits

IDP technology offers organizations a broad range of benefits. Some common Intelligent Processing Document benefits include:

Faster Processing

IDP eliminates bottlenecks associated with manual document processing through automatic extraction, classification, and routing pursuant to business rules.

Reduced Costs

On average, companies spend between $6 and $8 to manually process a simple document. More complex documents can cost upwards of $50. An IDP automates this process eliminating tedious and time-consuming tasks, allowing employees to focus on higher-value tasks. And it eliminates the costs of buying and storing paper-based documents.

Promotes Scale

IDP plays an important role in enabling end-to-end process automation. It simplifies and integrates many complex business processes.

Get More Out of Data

Converting unstructured data into usable form serves many purposes. It allows the data to be used in other processes, enables informed decision-making, and aids AI consumption. As McKinsey notes, “by combining the data derived from paper documents with the wealth of digital data already available, a comprehensive data landscape can be established, significantly enhancing data evaluation and analytics possibilities.”

Improved Compliance

An IDP is incredibly accurate. It eliminates error-prone manual data entry processes. It also keeps data safe by reducing the need for humans to handle sensitive information. And an IDP can streamline the regulatory reporting process and maintain an audit trail to improve compliance.

It is the Perfect Time to Implement an IDP Solution

Data will continue to play an increasingly important role in both our personal and professional lives. Businesses will continue to face challenges to process, classify, and store data in a way that optimizes its value and use. Intelligent Document Processing is a scalable and secure solution that can help organizations overcome data challenges and achieve end-to-end process automation.

There is no one-size-fits-all IDP solution. Every business has different needs and faces unique challenges. An IDP must be customized to fit your business rather than making your business fit an out-of-the-box solution. Plego is an industry-leading Intelligent Document Processing development company. Our experienced team has assisted countless organizations located around the world to get the most out of their data and achieve digital transformation.

Contact our experienced Illinois software development team today to discuss how we can help your business to overcome data challenges and gain an edge over your competitors.