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What is ICR and OCR? Why it Should Matter to You

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If you’ve been around computers for any length of time or ever worked with a document scanner, you’ve likely heard of OCR software. But what is ICR?

Is it something you need? What are the advantages? What are the disadvantages?

In the following, we’ll answer each of these questions and take a look at whether upgrading to ICR software is a good move for your business.

What is ICR, What is OCR, and What’s the Difference?

Both acronyms are about character recognition, or the ability of a computer to read a scanned image and convert it to text. OCR stands for optical character recognition.

OCR converts text in a scanned format back to text that can be used by a computer and edited if needed. Since the letters in our alphabet have a standardized shape, OCR software is programmed to recognize those shapes and convert them to text.

Imagine having a scanned version of a 50-page document and trying to locate something specific. Whether it’s a scanned image or pages in your hands, you’d have to read the entire document to find it.

With OCR, everything gets converted to text so you can use a simple search to find what you need.

Or imagine you want to change the wording in a brochure but you don’t have the original file. Rather than retyping everything, you could scan it, have the OCR convert everything to text, and change it to your liking.

OCR came first, but there soon came a need to be able to recognize more than typed characters on a scanned page. Namely, handwriting.

ICR, or intelligent character recognition, is an advanced form of OCR software, because it converts scans of both handwriting and typewritten text. While ICR is not as straightforward as OCR, it’s a very necessary technology.

Imagine for a moment the massive amount of paperwork being processed by large business like hospitals. A good deal of medical paperwork consists of forms that are a combination of typed characters and handwriting.

Think about it — when you go to the hospital and they give you a form to fill out, they hand you a form on a  clipboard and a pen to fill it out by hand. Someone then has to take that form and put it into the computer, thus the need for software that can do both tasks.

A Brief History

In 1968, the U.S. Bureau of Standards created a font style called OCR-A, that was designed to be machine readable. All the characters had a predefined shape and line thickness.

In 1973, a European version came about that was easier for humans to read, known as OCR-B. It became the international standard.

There are several other types of machine-readable fonts, and they all have a fascinating history.

Over time, typography evolved and new font styles arose. Companies processing an ever-increasing amount of data had to find ways to streamline their processes. Standardized forms that included both typed characters and handwriting introduced a new challenge for OCR technology.

Businesses moving to online cloud storage needed to be able to quickly access and search their documents. Another challenge was the labor-intensive task of entering information from handwritten forms into a database.

Many companies began to outsource data entry tasks, but it still required a lot of time by humans, which also meant human error.

The development of ICR streamlines a good deal of modern data entry. The ability to shift the workload from humans to machines not only saves on labor costs, but it also improves accuracy.

ICR is not an exact science, so the need for human quality control still exists, especially where accuracy is of paramount importance. As stated earlier though, higher-end ICR is a form of artificial intelligence because it can learn and improve upon itself.

By combining the latest in ICR technology and reducing human decisions, some companies are achieving accuracy rates as high as 99.97%. Learn more about how ICR can help you.

The Advantages and Disadvantages of Each

An obvious advantage of OCR over ICR is that it costs much less. It’s affordable by everyone but it does have its limitations. OCR software is not good at reading complicated fonts and most don’t read handwriting at all.

ICR is much more robust because it can recognize any font in existence as well as handwriting. Higher end ICR software even has the ability to learn handwriting, so its accuracy improves over time. On the downside, ICR software is much more expensive.

Why ICR Matters for Your Business

The use of standardized forms is becoming commonplace in every business. And the larger the company, the greater the need to use them. They range from employee onboarding forms for payroll and insurance to customer surveys and accounts payable.

Having a way to process that data in a quick and efficient way, week after week, could mean a lot to your bottom line.

In another example, freight bills for logistics companies often have prepopulated fields for things like customer info, shipper info, order number, etc. Fields for these forms can be customized in the ICR software.

If the software knows it’s reading a zip code field that should contain only numbers, it won’t mistake a zero for the letter “O”. It can also be matched against a library of known terminology specific to the industry.

It could also be tied to a customer database to reduce errors when reading handwritten sections.

Mortgage companies have large volumes of forms use on a regular basis as well. These can include VA home loan forms, borrower forms, homeowner and contractor agreements, FHA applications, and many more.

The healthcare industry is a prime example of the need for ICR technology within a document management system (DMS). Because of their extensive use of hundreds of different forms, it’s important to be able to input the massive amounts of data with minimal errors.

In fact, there are many businesses that could benefit by upgrading to ICR. It really comes down to your data-entry workload, and how much of your digital documents have handwritten information in them.

Should You Take the Leap?

Now that we’ve answered the question, “What is ICR?” it’s up to you to decide if it makes sense for your business. Because of its higher cost, ICR may not be suitable for the business with only one or two projects.

If you have a large amount of data to process on an ongoing basis, take a look at OCR first. Do you use a lot of forms that combine typewritten text and handwriting or use complex fonts? If so, ICR software may prove to be a powerful timesaver in reduced labor and increased accuracy.

In the end, you’ll have to compare the costs of ICR technology against the time and labor savings, as well as the ongoing workload you expect to have. Investing a small amount of time now to find out could pay big dividends in the immediate future.

For more information on all things IT and high-tech, check out our recent articles.

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