5 Reasons Why You Should Not Manage OCR Software Internally

Optical Character Recognition (OCR) technology can either be an accounts payable (AP) processor’s best friend or worst nightmare. If your OCR vendor of choice is providing you with consistently clean data that can effectively eliminate manual keying from your AP process, then it’s your best friend. If you select an OCR product that doesn’t live up to its promise and produces significantly less than 100 percent clean invoice data, then it’s a nightmare.

To illustrate the latter scenario, we talked recently with a client that acquired an OCR software product several years ago as an add-on module for their AP automation. They originally set up their software for decentralized scanning of paper invoices and then recently switched to a shared services model in which all invoices are routed to an offshore site for processing. While they will freely admit that the internally managed OCR software was more difficult to launch than they expected and never did achieve the throughput they envisioned, it was helpful for invoices that did work well.  As their mix of invoices has switched to being less paper and more PDF submissions, they have experienced a significant decline in their OCR capture rate, and since they don’t have internal IT document experts and are having difficulty getting internal resources at all, they are at a loss to fine-tune their OCR software to fix the problems. As a result, their software investment is basically lost and the organization has been forced into “throwing labor at it” and hiring twice as many full-time employees to manually key invoice data. This is a clear step backwards and is, indeed, a nightmare.

Unfortunately, this is not an isolated example. Many companies are stuck with legacy OCR software that is expensive to maintain (think IT resources, dedicated hardware, and physical datacenter resources) and somewhat inflexible in meeting the needs of their business in today’s world.

There is a better way.

Software as a Service (SaaS) OCR and associated digital mailroom services unshackles your organization and can help you avoid these five common pitfalls:

  1. Lack of expert resources on staff – In the example outlined above, the client that reached out to us didn’t have the internal IT document experts required to optimize OCR results. This, coupled with the general difficulty in getting priority for what are viewed as lower priority internal projects, means your OCR results will decline over time.
  2. It’s significantly more expensive and difficult – Having to hire staff to manage and troubleshoot this software is more costly and headache inducing in the long run than simply outsourcing these responsibilities to a third party that will automate all aspects of your OCR AP process and ensure you 99.9% accuracy.
  3. Longer startup – It takes four to five times longer (16-24 months) to get your in-house OCR software up and running at peak efficiency than it does when you outsource this task (three to five months). That’s because you have to train people internally how to use it and how to initialize it and that takes significant time. With a third-party OCR solution, you aren’t burdened with these concerns.
  4. Undesirable results – OCR software is generally promoted to be 98% accurate, but that’s rarely the way it plays out, and even when it does it is only in optimal conditions. Our above example outlined a common occurrence: poor image quality that often accompanies PDF-based invoice documents leading to increased manual keying. An OCR AP solution shouldn’t increase manual keying, it should virtually eliminate it.
  5. Unusable software helps nobody – Once again, the above example illustrates how easily internal OCR software can become unusable while still sucking up valuable resources in your organization.


If you have any questions about OCR software or how an outsourced SaaS OCR accounts payable solution can work better for you, please contact us at info@DataServ.com.

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