Q & A: Forms Processing (i.e. Data Capture)

In 2009, many companies are looking for ways to streamline their business processes. This means saving manpower and money while still performing the day-to-day tasks that are necessary to operate a business. With the help of Samuel Schrage, president of AnyDoc Software, we will look at one aspect of ECM, forms processing (i.e., data capture), and how forms processing fits into document management as a whole.

1. What is forms processing?

Forms processing, more commonly referred to as automated data capture, is a technology that has greatly evolved over the past two decades. By replacing manual data entry with automated data capture, stacks of paper documents are quickly turned into useable data. The data is captured using optical character recognition (OCR) technology — the electronic translation of printed text from a document image (usually created by a scanner) into machine-editable text. Or, in other words, printed text on a document image is "lifted" and converted to electronic form — without any manual data entry required.

Previously, forms processing or data capture technology could only be applied to structured forms — such as a credit application or an order form — where the data is located in the exact same place from form to form. Advances in technology now make it possible for some solutions to automatically capture data from semi- or unstructured forms, such as invoices or insurance notices. Invoices are a good example of where each document contains similar data, such as a PO number, a date, or a total, but the data is located in a different place from invoice to invoice. Instead of creating a template to locate the data on each different document — which is neither efficient nor feasible — a specialized technology can now be used to locate and capture the data without the use of templates.

2. When should a forms processing software be included in a total ECM solution?

Forms processing is a logical next step to a proposed imaging, ERP (enterprise resource planning), or document management solution. As a critical piece of a "total" end-to-end solution, it should be offered whenever a company is faced with manually entering data from stacks of paper into an ECM, ERP, or other back end system. Forms processing (or data capture) software replaces the need to perform tedious manual data entry — saving time and money, and increasing data accuracy. And, because most software is designed integrate with both front and back end systems and hardware, it is easy to add data capture software to existing ECM software and hardware solutions. Not only will a forms processing solution boost a client's productivity, the VAR also will benefit as a result of the additional sales.

3. How does the software work?

To automatically capture the data contained in a structured form, a template — or "map" — is created, defining the areas on the form where each piece of data is located, such as an applicant's name or social security number. After scanning, the software applies the template to the document image to locate the desired data fields. For each data field — "zone" — defined by the template, the software applies the appropriate OCR engine. Once the data is captured by the software, it is automatically formatted and validated according to a user's existing business practices.

When processing semi- or unstructured forms, it isn't feasible to create a template for each version of document that a user may encounter, such as in the case of invoices where each vendor has a unique format. Instead, a technology, such as AnyApp™ is applied to enhance efficiency and processing speed. AnyApp finds the data wherever it may be located on the page, and using a unique "memory" technology, remembers where the data was found, speeding document processing when that particular format is encountered in the future. Once the data is automatically captured and validated, it (along with the document images) is transferred to the appropriate ECM, ERP, accounting, or other back end system.

4. What are the benefits to the end-user?

By replacing manual data entry, end users can speed document processing, increase data accuracy to nearly 100%, and slash labor costs. Deployed in an accounting department, benefits include being able to take advantage of early payment discounts, avoid late payments, and speed cash flow. In addition, a good automated solution is scalable, allowing fluctuating document volumes or company growth to be easily managed, without the need to add additional staff or pay costly overtime.

We've seen many actual implementations where an ROI has been achieved in just six to nine months. It's not unusual for an organization to cut processing time from weeks to days or oftentimes, mere hours, and to realize annual labor savings of hundreds of thousands of dollars.

5. How will you know if a forms processing software is compatible with other software packages being used by the client?

A good solution is designed to easily integrate with a client's existing business systems. For each solution implementation, a thorough on-site discovery process should be conducted. During this visit, solution providers should ensure they have a complete understanding of the existing software, hardware, document and data workflow, business practices, and more, to ensure integration success.

6. What about hardware?

Hardware compatibility is also designed into a good data capture solution. An example of built-in compatibility is the solution's ability to communicate with the drivers in all TWAIN-based scanners. This means, in part, the software can perform a quality assurance phase during the document scanning process. The functionality also exists to send notification back to most scanners after successful data capture and transfer to a back-end application.

7. What vertical markets can use forms processing solutions? (aka: Who can VARs sell this to?)

Every industry faces the challenge of managing their paper documents, and each niche has its own need for forms processing. Specific verticals that are especially fertile for forms processing solutions are accounting, healthcare, insurance, banking, and education.

Invoice, remittance, and check 21 processing can be combined for a complete accounting solution, or modules can be added as needed. With invoice and remittance data being fed into the same ERP or accounting system, more companies are looking at a complete accounting solution to automate both their AR and AP departments. Check 21 technology has been incorporated into forms processing and capture workflow solutions, making it possible to offer AR departments the ability to automatically transmit checks to the bank and receive electronic acknowledgements.

Due to the paper-rich nature and the variety of specialized forms used in the healthcare industry, it continues to be a rich market for forms processing. Solutions for processing explanation of benefits (EOBs), claim forms (e.g. HCFAs, CMS-1500s, and UB04s), encounter forms, and the classification of patient records are in demand because of the dramatic increase in productivity and data accuracy they can provide. The insurance industry also continues to be a strong market for VARs who target claims processing and records and notice management.

VARs also are seeing forms processing solutions being embraced by the banking industry, including processing documents, such as credit card applications, but also for mortgage loan package classification and data extraction. Even with the current state of the housing market, providing effective document and data classification solutions remains critical as lenders need to manage all of the movement of loan packages and also for non-mortgage type loan classification. VARs who understand the intricacies of the business processes and the decisions associated with each action will still find this vertical promising. A niche market within education also continues to provide opportunity, particularly in transcript processing.

8. How can forms processing be an "add-on" sale?

A forms processing solution effectively connects a front end scanner to a back end ECM or document management system, adding to the productivity of entire process — and a VAR's bottom line. If a VAR has an end user's attention, it makes sense to also inform them of the option for data capture — allowing end users to boost the efficiency of their scanning or back end systems even further.

Because data capture software is designed to be part of an end-to-end ECM solution, VARs should look for a software solution designed to be flexible — enabling it to easily communicate with a user's existing hardware and software. This allows clients the ability to protect as well as leverage their investment in systems they already have in place or are about to purchase. In addition, a good data capture solution should be easily customizable. This means that existing business processes can be supported, keeping the cost-of-ownership low because expensive programming isn't required to get a solution that enhances an end user's business — and their existing business systems.