What Is Optical Character Recognition?

For Thoughtful+ Members

Unlock all blogs, whitepapers, case studies, webinars, and more!

What every organization on the cusp of a new digital transformation needs is technology that meets them where they are now, while enhancing how they do business.

Optical character recognition (OCR) is an essential basic technology for organizations who are still processing large volumes of unstructured data. But how far does OCR’s capabilities truly extend, and what technologies can OCR be attached to to truly creative transformative technology investments?

OCR is a capability, not a solution

Optical character recognition is a technology that has been around for decades, but was brought to the cloud in the early 2000s. Since then, it’s been enhanced to recognize handwritten characters in addition to characters in any font. But it’s important to realize that OCR on its own isn’t a one-stop shop solution for intelligent document processing. OCR is most powerful when paired with other technologies to process documents, and then turn that information into usable data.

Using OCR with automation for intelligent document processing

Most often, OCR solutions are packaged within other applications, which means that there’s virtually no extensibility to the capability. If you want to process a document, you have to important it into the system with OCR before you can do anything with it, and then that data lives in a silo.

But when OCR is paired with custom automation, it’s no longer tied to legacy systems. You can process documents in email attachments, in billing systems – anywhere in the cloud or on your servers.

What is RPA?

Robotic process automation, or RPA, is the automation of entire workflows and sequences of digital tasks using custom-built programs. You may have heard these programs referred to as bots, but we prefer to call them digital workers.

Digital workers can go through a process just like a human worker can, logging in and out of applications, copying and pasting data over from one system to another, and even reading documents and sending emails.

RPA when combined with OCR results in a form of intelligent document processing, or IDP. It’s at the nexus of these three technologies where companies start to see more than just automated document processing, but the automation of entire digital workflows – and this is where OCR starts to create some real transformation in an organization.

Use cases for OCR-enabled digital workers

When you combine the ability to read and parse unstructured text and data sets with automation, you have an opportunity to automate large swaths of rules-based, repetitive processes in your organization. Some of these use cases include:

Revenue cycle management

Digital workers are able to use OCR technology to read explanations of benefits (EOBs), check for coverage eligibility, process primary and secondary claims, apply payments, and even scrub data sets for irregularities that could cause errors in medical billing.

Legal case management

Digital workers use OCR to pull details from case docket updates in emails and court dashboards and import them into case management software, cutting down on paralegal costs and allowing these employees to focus on more valuable, strategic work.

Invoice processing

Digital workers can automate accounts payable from start to finish, reading invoices as they come into an inbox, extracting data and inputting into accounting software, and either alerting human workers that they’re ready for review, or issuing payment automatically.


Dan Parsons

Dan is the co-founder and COO of Thoughtful. He’s built his career in helping startups build incredible product roadmaps, driving innovation with strategic decision-making and thoughtful process improvements. Now, he’s taken that passion for innovation and project success and turned it into a way for companies of all sizes to scale their own operations, faster.

Our bots are better, faster, smarter.

Our FREE process evaluation is your first step toward automation.

Limited Time Offer: 3 Days Remaining

get started