AI-Powered Data Extraction and Why Businesses Need It

AI-Powered Data Extraction

Since the first paper was invented, humans used it to write and document many important details.

However, we fast forward thousands of years and it is still surprising that humans continue to use this ancient invention even though we have access to digital documents that give us faster searchability and access to information.

Extracting data from physical documents is an expensive and time-consuming process that still haunts many employees.

From a large number of physical documents that many companies still tend to have, finding the right information and then exporting it can seem like forever.

All things considered, it’s no wonder manual data extraction is error-prone, which can lead to costly mistakes in business decision-making processes.

Fortunately, there is a solution called AI-powered data extraction that helps both companies and their staff avoid this inconvenience and even improve this process.

AI data extraction solutions automate the extraction of data from physical documents and their digitization. Many companies turn to this solution as it eliminates manual work, reduces errors, and saves the company time and money.

Before we dive into all the benefits mentioned above, it’s important to understand what exactly we mean by AI data mining and classification.

What is AI data extraction and classification?

Data extraction is the process of obtaining and extracting information from data sources. This process is not always easy, since many times the data sources can be physical documents such as contracts, invoices or agreements and, therefore, manual data extraction is necessary.

These tasks are repetitive, dull, and require hours of human time. However, it gets even worse when this data needs to be classified and organized accordingly.

AI-powered data extraction and classification means fully automating this process where intelligent algorithms can handle the following:

• Interpretation of data (even from physical documents);
• Extraction and digitization of data;
• Connecting the data to the corresponding information source.

How does it work?

For both physical and digital documents, AI system uses the combination of Optical Character Recognition (OCR) and Natural Language Processing (NLP).

Optical Character Recognition (OCR)

OCR is the process of recognizing text within a digital or physical document (handwritten or printed).

With feature detection algorithms, OCR technology can identify characters by analyzing their shape: lines, strokes, and curves. Such character-by-character recognition may seem like a long process, but OCR can give accurate results almost instantly.

Natural Language Processing (NLP)

The next important technology for data extraction is Natural Language Processing (NLP). NLP has the ability to help computers understand how human written and spoken language works.

NLP algorithms understand sentences by converting a large number of texts into matrices. The algorithms divide the sentences and analyze how many times certain words appear in the sentences, giving them a better idea of what is happening within the document.

The result

The combination of the two helps to recognize and identify characters, understand the data contained in the document and digitize it in a matter of seconds.

Real-life example

With the help of an AI development company, MaxinAI, a document extraction platform, ExtractHD, offers its clients the ability to automate the extraction of proprietary documents with high precision.

This is how the simple process looks like:

• Users upload the scanned version of their document;
• The solution uses OCR and NLP technologies to identify and understand the text in the document.
• All key information (tenant name, invoice number, contract start date, etc.) within the document is extracted and connected to the corresponding tag in the system.

With the help of ExtractHD, users such as property managers or tenants save time and money by freeing approximately 30% of their workday instead of manually extracting data from documents.

How do companies benefit from this technology?

The ExtractHD example is just one use case of how A solution simplifies business operations. Let’s discover other common benefits that AI data extraction has to offer companies.

Decreased human error

Repetitive work has been shown to contribute to loss of concentration, leading to fatigue and stress. All of these factors contribute to the prevalence of human error.

Automating data extraction with AI results in a more precise and accurate result. AI-powered data extraction solutions are trained on big data, use OCR and NLP algorithms whose main mission is to reduce error rates and improve precision.

Saving time

IDC’s white paper reported that workers spend approximately 5 hours a week searching, and not finding, the files they need.

As we mentioned earlier, although the way OCR and NLP work is sophisticated and advanced, these technologies only need seconds to identify the relevant text and extract it.

Thanks to AI data extraction and document digitization, employees can instantly find the information they need using the relevant keyword and digital search.

Cost savings

According to the Global Maritime Weekly Digest, in 2017, the issuance, verification, payment and reconciliation of 1.26 billion freight invoices were required.

And considering that still today 90% of all invoices worldwide are processed manually, one can imagine the substantial costs that are associated with this process.

Automating the data mining process with AI frees companies from the costs they have to pay employees to do this work manually and saves them millions of dollars.

Happier and more productive employees

Repetitive work is believed to increase the psychological burden on an employee causing not only mental stress but also physical damage such as muscle pain.

Therefore, eliminating such heavy and repetitive work means that employees will free up their time and dedicate their skills and attention to more valuable and meaningful tasks.

Meaningful work can make staff more engaged and productive, which contributes to employee retention and benefits overall business results.

Conclusion

At first glance, manual data extraction may seem like an easy and uncomplicated task, however, this belief is far from the truth.

As we saw in the previous examples, its costly and time-consuming process takes hours out of the staff’s workday and poses a threat to the well-being of the employees and the profitability of the company.

For many companies, the recent pandemic has amplified the need to go through contracts and find the force majeure clauses that made data mining and digitization even more important.

Unfortunately, still, the majority of businesses have a lot of physical documents on their desks and shelves. However, due to the immense benefits that AI-powered data extraction offers, more and more companies are digitizing their papers.