Optical Character Recognition. What is OCR and How Does it Work?


I am forever thankful that we have moved past the point where all of our communications are hand written. Have you ever tried to read someone’s writing and become bewildered by the fact that those ‘squiggles and lines’ they call words are actually being passed off as a written form? Bad hand writing

I am grateful that we have gotten to the point where just about everything is typed and as a result, everything is readable in real-time. However, what I am even more grateful for is the fact that this process can be automated for things we do not need to read.

As a solutions consultant for the PNORS Technology, I find the process of Optical Character Recognition (OCR) rather fascinating. Believe it or not, this process is not something that only tech savvy folk can understand. This automated data capture process sees a number of benefits for any organisation looking to streamline their data capture and extraction.

OCR is the practice of electronically scanning documents primarily to convert them to digital copies or to read the characters on a page to strip off the information you need. But a lot of my clients don’t fully understand how or why this is the future of data capture.

How does OCR work?

How does OCR work?If I were to tell you that everything you read is retained using optical character recognition you would probably laugh at me. Well, it's true, each word you read is made up of a combination of letters that have a predefined rule about what they mean and how we use them.  Your eyes determine the shape and your brain correlations these shapes with predefined rules that are essentially used to give a value to the thing you are reading.

In short, OCR in most cases is the electronic conversion of text, writing, images, etc. to an electronic format. Generally, OCR is used to streamline data extraction as a way of electronically automating data capture rather than by humans. What we see at Datatime is a number of customers coming to us with either box's of archived documents or forms, surveys, etc. and they need an efficient, accurate and seamless method of capturing and extracting the data. I often tell them, ‘you give us the documents, we will give you data that you can actually use’.

Through document scanning and OCR, we either get given a history of archived documents that need conversion, or we agree upon a daily data capture of forms, surveys or business documents and turn them into data that our customers can actually use, without the manual extraction. The OCR process uses advanced technology with predetermined rules to pick up the data which is further verified by a team of specialists.

Benefits of utilising OCR technology for data capture


Benefits of utilising OCR technology for data captureAs technology advances with the blink of an eyelid, everyday life is becoming more and more automated. It's understandable that some organisations are stuck in their ways but to me, if you don't take advantage of technology, you risk losing your competitive advantage. 

Physical document scanning, manual data entry and capture is a time-consuming process. However, it can be easily and cheaply managed by a third party organisation specialising in this process serving a number of different organisations keeping their overheads down, which results in savings to their clients.


When OCR is utilised efficiently and correctly, your data is most likely going to be error free. The biggest issue with organisations doing in-house data entry is inaccuracy and high overheads due to a number of reasons but generally because of high turnover of staff. However, it’s actually quite common for those in this position to miss vital information due to the nature of the work and if not verified, this issue could go unnoticed until it actually causes problems. OCR is not 100% sound proof as you will still need to verify some the data manually.

Image-scanning OCR has multiple applications that take the effort out of document analysis. These services can either be automated or controlled, the latter producing better results, but taking longer. 

Save costs and improve efficiency 

It may seem like an expensive project sourcing this technology or outsourcing to specialists, but in the long run, it’s actually cost efficient. For argument's sake, let’s say that the technology costs $50,000. If you have 3 people manually entering data at $50,000 a year, and you only need one person to administer the technology and verify the data you’re saving $50,000 in the first year and $100,000 every year after that. And to outsource could even be cheaper as third party organisations streamline these processes with highly skilled employees.

OCR also makes your documents more accessible which leads to a centralised data centre and in turn, streamlines your data analysis. Your data will be kept in a single location, making it accessible by your whole organisation. As a result, your will improve efficiency and cut costs. 

Images: Deposit Photos

Felix Choo

Felix Choo MBA B.ENG – Solutions Consultant, PNORS Technology Group

Having worked in national and senior roles in both Timber and Packaging Industries, Felix has gained significant experience and knowledge in a variety of businesses and business processes. Being a creative problem-solver, he is a great listener and seeks to understand a client’s challenges and difficulties, before strategising and proposing a solution.

Felix is a man of many talents, approaching challenges head on which assists his strategic decision making by turning ideas, thoughts, or even a bit of scribble on a post-it note, into massive action with excellent results. Felix is passionate about working side by side his clients as they grow and he works with them to achieve great things.