IDP: More Than Just Another Term for Business Transformation

The pace of technology has meant we’re constantly bombarded with new abbreviations and acronyms to encapsulate this trend or that technology. Intelligent document processing (IDP) has recently exploded onto the scene as the need to automate critical business workflows has become an unavoidable business requirement to stay competitive—especially for data onboarding and management.

This is true across vertical markets, representing a diverse array of unique challenges and business needs. From healthcare’s stringent compliance demands to manufacturing’s relentless pursuit of efficiency, each vertical market requires specific solutions and vendor collaborations. Modern workflow automation solutions are being tailored to meet these distinct industry requirements; IDP technology is not just an enabler but a transformative force. In this article we’ll explore common business challenges that IDP solutions address in various vertical markets, as well as the qualities and features to look for in a solution to help give your organization a competitive advantage.

Understanding IDP and its role in modern business

IDP refers to advanced systems that combine machine learning (ML) and artificial intelligence (AI) to automate the processing of various documents across an enterprise. Unlike legacy document capture systems, IDP is uniquely capable of interpreting, extracting, and managing data from a wide range of document types. This technology stands at the forefront of modern business practices, enabling companies to simplify complex, document-intensive processes, reduce repetitive manual tasks, and significantly enhance overall accuracy and productivity. IDP represents a crucial intersection in business technology, bridging advanced data capture with business process automation.

By leveraging AI and machine learning, IDP solutions have the potential to streamline and optimize document process workflows to save organizations big money and prevent even bigger headaches.

The technological backbone of IDP

IDP solutions are grounded in established technologies like optical character recognition (OCR), intelligent character recognition (ICR), and machine learning (ML). The technology has gone beyond automatic recognition and digital conversion of typed, handwritten, or printed text from documents and images.

The recent explosion of AI platforms has brought new capabilities and opportunities to the market, enabling IDP systems to learn from data, improve processes over time, and handle a broader range of document formats and types with near-perfect precision.

In addition, the hyperscalers (Microsoft, Google, and Amazon) have built AI services based on immense data stores and computational capacity. They are fueling even faster innovation by providing foundational models and prebuilt models for all types of documents. Furthermore, access to generative AI is empowering businesses to query information from documents on demand, for faster and more informed decision making.

Serious business value across the board

IDP might not be uttered as frequently as AI, but practically all enterprises will need to be familiar with it. The time is now for business leaders to research and consult with industry experts to maintain a competitive level of productivity and future-proof the success of their organizations. Deploying the right IDP solution will enable an array of lasting benefits, including:

Better operational efficiency and data accuracy:
IDP automates and accelerates the processing of various document types, enabling businesses to handle large volumes of documents swiftly and with greater precision.

Significantly less manual labor:
One of the most significant challenges that businesses face when dealing with large volumes of documents is manual data entry, which is time-consuming and prone to costly human error. IDP solutions automate the extraction of data from documents, easily validating, classifying, and augmenting data from various document types to ensure swift and accurate delivery of data into business systems.

Consistently higher productivity:
Fast and accurate document onboarding and processing eliminates the bottlenecks and delays common with legacy systems or poorly integrated applications. The right IDP solution can streamline document processing workflows to ensure that information is available to relevant stakeholders in a timely manner, thereby improving productivity and customer satisfaction.

Reduced risk:
By automating document processing with software that leverages machine learning and AI platforms, IDP software minimizes the risks associated with manual data entry, such as errors in financial reporting, inventory management, and customer orders.

Better document accessibility and collaboration:
IDP solutions enhance document accessibility by converting unstructured or semi-structured data into usable formats which can then be easily searched, indexed, and retrieved. This enables organizations to efficiently locate and access critical information when needed, for better decision-making, sharing, and collaboration among team members.

Cost savings:
Automating document processing reduces the need for manual intervention, thereby saving on labor costs and enhancing overall business productivity.

Compliance and quality control:
IDP solutions help maintain data integrity and compliance by automatically identifying, extracting, and validating sensitive data in documents, enabling the implementation of secure and compliant data handling practices. This is especially crucial in regulated industries like finance and healthcare.

Unique challenges in vertical markets

With their distinct characteristics and needs, major verticals like healthcare, insurance, financial services, transportation and logistics, and the public sector all require tailored approaches to technology platforms and integrations. The emergence of IDP, with its ability to integrate machine learning and AI, is helping to transform how companies are onboarding and processing critical business information. IDP is also helping organizations deliver interactive customer experiences to gather customer data at the start of a process rather than later in the back office.

Not all IDP solutions are the same, and it’s becoming increasingly difficult for some organizations to navigate the IDP software landscape to determine the best fit for their organization.

Intelligent automation in healthcare

Healthcare data challenges comprise patient onboarding, care delivery, privacy, and regulatory compliance regarding records handling and storage. A recent study by Deloitte highlighted that 90% of healthcare CIOs are prioritizing technology investments that enhance the patient experience and improve compliance and operational efficiency. The challenge lies in integrating technology solutions that can effectively navigate the sensitive landscape of patient data while streamlining complex processes with as little manual effort as possible.

By integrating IDP into their processes, healthcare organizations can handle vast amounts of personal and medical data, ensuring rapid and accurate entry into healthcare systems. This automation accelerates the admissions process and significantly reduces human error, helping to safeguard patient data privacy and ensure compliance with stringent regulations like HIPAA in the United States. And, by automating routine administrative tasks, healthcare professionals can allocate more time and resources to direct patient care.

A study conducted by McKinsey & Company in 2023 highlighted the economic impact of AI on healthcare and found that wider adoption of AI in healthcare could lead to significant cost savings in the U.S., potentially ranging between $200 billion to $360 billion annually. These savings are attributed to the application of AI in various nonclinical areas such as administrative documentation and financial management processes, demonstrating the vast potential of intelligent automation in enhancing healthcare efficiency and patient outcomes.

Manufacturing: Efficiency and precision

The manufacturing sector is driven by the relentless pursuit of efficiency and precision. Here, the challenge is deploying automation and AI services that not only increase production efficiency but also ensure quality and adaptability in a rapidly changing market. By integrating advanced technologies such as robotics and AI, manufacturers can ensure that every product meets higher and higher quality standards.

The automation technology in this sector has been impressive for a long time, but the more recent availability of AI technology platforms is taking manufacturing to an even higher level of precision, speed, and accuracy. In addition, a recent industry study highlighted that AI is significantly improving manufacturing efficiency and productivity by eliminating repetitive tasks, allowing employees to focus on more high-value activities.

Other forms of progress include better quality control, simpler supply chain management, and reduced environmental impact. AI is contributing to sustainability in manufacturing by minimizing energy consumption through efficient scheduling of processes and by enabling predictive maintenance to minimize downtime and waste.

Finance: Improving the customer experience and mitigating risk

AI is enabling banks to create automated experiences that help them win new customers and retain existing customers. Onboarding a customer can now be fully automated to handle inbound customer data while applying risk and predictive analytics as part of the process.

Risk management is also being impacted by AI. The advanced processing capabilities of AI allow it to handle vast amounts of data quickly, aiding in tasks like credit risk monitoring. For instance, AI’s predictive analytics are instrumental in identifying potential defaults before they occur. This is helping financial institutions make better lending decisions and improve overall profitability. This use of AI in risk management has become crucial for maintaining the financial stability of these institutions.

The finance industry is also witnessing a surge in the use of intelligent automation systems to improve process efficiency, the customer experience, and fraud detection capabilities. For example, AI-powered systems excel at detecting identity fraud by reading ID documents such as passports and drivers licenses and then verifying them with “liveness detection” technology that automatically identifies unusual patterns and potential security breaches. This technology is playing a vital role in safeguarding financial transactions and helping businesses thrive in our increasingly digital landscape.

Choosing the right solution for any industry

Regardless of the industry or unique needs of a given sector, there are several critical factors that should always be front and center when selecting an IDP solution or any other form of intelligent automation system. The first step is to analyze the business process requirements, including document types, typical volume, processing time, complexity, and system integration needs.

This can be done in combination with process discovery and mining tools that look at the entire process and the interactions your employees have with the data and documents they process. From there, a robust IDP solution should be able to handle diverse input sources and integrate seamlessly with data management platforms and enterprise systems.

Some IDP solutions come with built-in proprietary AI, while others integrate with leading AI tools, offering greater flexibility and scalability. My observations in the automation space are pointing to a consistent conclusion: the ability to integrate with AI platforms from industry giants like Microsoft, Google, and Amazon will be increasingly vital. This open and flexible approach significantly influences a system’s adaptability and future growth. As technology advances, your systems advance along with it, with minimal (if any) effort or resource allocation.

Following a successful deployment, how the solution is supported by the vendor becomes another key consideration. Choose a software solution backed by a company with a strong support organization, one that performs training, maintenance, and individual technical support. Look into the company’s Net Promoter Score (NPS) to get a reliable indicator of customer satisfaction and success.

The integration of workflow automation, ML, AI, and IDP is essential for addressing the unique challenges of different business sectors. Each technology brings specific strengths that, when combined, can lead to significant improvements in efficiency and productivity. IDP has quickly established itself as an indispensable component of digital transformation, enabling businesses to automate document and data processing workflows to simplify operations and maintain competitiveness over time.

IDP solutions are unlocking new business opportunities across all sectors by improving data accuracy and access to vital information, enabling informed decision-making, and eliminating the tedious manual tasks that often lead to errors and corrective actions.  

Bill Galusha is a veteran Product Marketing and Product Management professional with over 20 years of experience in enterprise software. As the Global Portfolio Solution Leader at Kodak Alaris, Bill leads the intelligent document processing (IDP) solutions team with go-to-market strategies that create business value for enterprise organizations. He is a trusted advisor and thought leader in his field, guiding market awareness for Kodak Alaris technologies and services.