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Data extraction is one of the most laborious processes businesses undertake as they move into the enterprise level. The sheer volume of documents that they have to deal with can require thousands of man-hours each month, which requires hefty financial investment and bloats employees’ workloads with monotonous labor. Historically, businesses that didn’t want to manage all of this labor in-house would contract to third-party data entry teams that would handle it for them with their own staff.
As technology like optical character recognition (OCR), AI, and machine learning have evolved, developers have found ways to utilize and combine them to meet the needs of data-reliant businesses with software. This has allowed businesses to do more with a smaller staff and made third-party data capture far more effective and affordable.
To help businesses understand how data extraction software has evolved, and what the best options are for them, we will break down the following:
- What third-party data extraction options looked like before
- What data extraction software brings to the table now
- How data extraction and third-party services combine to maximize value
Let’s dive into each to review how data extraction software can add value to your business.
Third-Party Data Options Before OCR
Before OCR technology was widely commercially available, third-party data extraction took the form of data entry outsourcing. Essentially, third-party companies would staff data employees to manually enter data from scanned documents sent by their client businesses. This allowed companies to avoid having to staff these employees themselves, and they could benefit from economies of scale since these data companies focused solely on extracting data from documents and inputting it where it is most helpful to their clients.
While this provided significant value for its time, it didn’t solve the two most pressing issues about in-house data entry: speed and accuracy. While it partially addressed the issue of cost, data was still being manually entered the same way it would in-house and could suffer the same pitfalls regarding human error and the physical ability to capture and record data in a company database.
There was also the issue of transparency and accountability. One benefit of handling data in-house is the ability to control data extraction processes and set standards for the accuracy and ethical handling of data. Outsourcing requires a lot of trust, especially in highly regulated industries like healthcare and insurance. With outdated technology, it was historically difficult to provide complete transparency into how the outsourcing partner was handling and auditing data. Additionally, manual processes are simply harder to keep track of and maintain consistent standards for.
Pros and Cons of Traditional Data Entry Outsourcing
| Pros | Cons |
|---|---|
| ✔ Slightly more affordable than in-house | ✘ Doesn’t improve data accuracy |
| ✔ Avoids the hassle of staffing large data teams | ✘ Very little speed improvement |
| ✘ Lack of transparency/consistency |
While helpful, these outsourcing options often fell short of the value needed for companies to trust a third party with their sensitive data. This created the demand for technology that could provide this value while mitigating outsourcing risks.
Data Extraction Software Brings Innovation
As mentioned above, optical character recognition (OCR) technology combined with AI and machine learning (ML) allowed for much more advanced– and widely available– data extraction software.
To clarify why, let’s break down what these technologies do for data extraction in simple terms:
| Optical Character Recognition (OCR) | Enables software to recognize and store/output alphanumeric characters, both typed and handwritten, with exceptional accuracy. |
| Artificial Intelligence (AI) and Machine Learning (ML) | Allows OCR-enabled software to perform basic functions with the information provided, like storing/organizing invoice data within a database and using the context provided by similar documents to learn where to find specific data points consistently. |
While these technologies all have much broader use cases, these are the essential functions that they bring to data extraction software as it exists now.
Data extraction software currently exists in many different forms for both consumers and businesses. There are softwares that focus on extracting data from scanned documents, the internet, email inboxes, and more. This has allowed nearly every data-driven enterprise the ability to use data extraction software in some capacity to reduce not only the cost of data management, but also speed and accuracy.
Pros and Cons of Data Extraction Software
| Pros | Cons |
|---|---|
| ✔ Better data accuracy | ✘ Still requires in-house data staff |
| ✔ Faster data extraction | ✘ Complicated onboarding and staff training |
| ✔ Lower labor costs |
Alone, these software tools can enable a smaller team to perform more data entry work, while also improving the consistency of their output. This leads to fewer misinputs, easier auditing, and faster turnaround times. This is all great, and sufficient for many businesses, but still requires these firms to have in-house data teams. It also requires that these teams are trained in the software, and the software is onboarded properly, which costs businesses a significant amount of time. This is why tech-forward data outsourcing was born.
Combining Outsourcing with Data Extraction Software
By combining the benefits of traditional data outsourcing with those of modern data extraction software, tech-forward data outsourcing companies can maximize value for their clients. Data is more accurate, faster, easier to audit, and more cost-effective than it would be by employing software alone, but it comes with added outsourcing benefits like not having to staff or train an in-house data team. Companies can simply send in their scanned documents and get back the data they need exactly where they need it.
These companies not only fill in the gaps left by software tools but also mitigate the risks associated with traditional data outsourcing. By using AI and ML-powered OCR software, the standards and security procedures for data are exceptionally consistent. It is also far easier to provide transparency and control to client firms, as they can work with their outsourcing partner to set the exact parameters and regulatory compliance procedures that the software will follow, knowing that these will be consistently applied and the path of each document’s data will be fully auditable.
Pros and Cons of Tech-Forward Data Outsourcing
| Pros | Cons |
|---|---|
| ✔ All the same benefits of data extraction software | ✘ Choosing the right partner can be difficult |
| ✔ No need for an in-house data team | |
| ✔ Fully transparent and auditable |
As the combination of data extraction software and outsourcing provides the best of both worlds, there aren’t many gaps in its value proposition. The only point of concern for companies considering this option is choosing the right partner.
Choosing the Right Data Extraction Outsourcing Partner
Data-driven businesses deal with higher volumes of documents, funds, and staff information that require a high standard of accuracy and security. As a result, they should seek out a data extraction outsourcing partner that:
- Offers the most advanced machine learning-enabled technology
- Provides support that aligns with their working hours regardless of where they operate
- Stores data in an easily auditable database with transparent operation
- Prioritizes data security
- Has experience working with enterprise-level businesses across multiple industries
iTech data offers all of these helpful features and more.
Automate Data Extraction with iTech’s Advanced Technology
We at iTech pride ourselves on our cutting-edge machine learning OCR software, top-of-the-line onboarding experience, and ongoing support. We also offer 24/7 access to support personnel and senior account managers to maximize visibility and peace of mind, eliminating the “black box” approach to outsourcing.
To learn more about data extraction software, fill out the contact form below.
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IDS Commander iTech2021
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