What is the BPO Sector
Business Process Outsourcing: Competitive advantages through outsourcing document extraction
What is business process outsourcing?
Business Process Outsourcing (BPO) has its origins in the manufacturing industry, where soft drink manufacturers have outsourced some stages of the supply chain to other companies. Although these stages were not core business as they did not directly affect the end product, BPO still played an important role in other operations that helped maximize these companies' profits over the years.
Today, many sectors and companies are adopting the practice of BPO, with two main categories of BPO: back office BPO and front office BPO.
Back office BPO refers to an agreement in which a company outsources tasks such as IT solutions, accounting, data processing, payroll processing, invoicing and quality assurance to other companies. On the other hand, front office BPO refers to services that are more visible to customers, such as social media marketing, call center operations, technical support or sales.
Over the years, many organizations have started to outsource such business processes rather than doing them in-house. Financial services, commerce, marketing and sales, information technology, entertainment, advisory services, and hospitality to name a few. In all of these branches of industry, certain processes are carried out that do not form the core business of their business models, but are nevertheless necessary for a smooth process and delivery of the value proposition. There may also be other processes that are only required for a temporary period of time, but are again absolutely necessary. Instead of opening internal departments, assigning them resources and training and hiring employees, it often makes more sense to hire an external company or agency that specializes in performing these tasks.
How does OCR fit into the BPO framework?
One of the most important advances in the last few decades has been the collection and use of huge amounts of data. With the help of improved computing power, it is possible that more and more data can be generated and processed. The processing of the data in turn leads to new data that must be saved.
While a substantial part of this data is stored in digital form, a lot of the data is also available in written and printed form. Examples of this are delivery notes, invoices, receipts, notes, correspondence, account statements, contracts, certificates and many more. However, since this data is also processed further and digital document management systems (DMS) are standard in many companies today, this data must first be properly digitized before further processing. To capture the text on such documents, the concept of Optical Character Recognition (OCR) was developed. In simple terms, OCR is a technique that processes a document in a specific way to capture the text it contains. For example, the date, address, references and important amounts can be recognized and read in. This technique is not only accurate but also fast, which reduces the time required compared to manual entry.
What began as an experiment to solve a seemingly impossible task has become more and more of a necessity today. Document extraction by means of OCR has meant that companies in more or less all departments have adapted to the new possibilities. Driven, among other things, by - yes, exactly - increasing cost pressure. Financial service providers use OCR software to extract data from contracts, official certificates, tax returns, etc. from customers. Retail and some other industries use the technology, for example, to recognize line items on invoices and to be able to carry out order comparisons and automatic bookings. Many companies also offer customers a camera SDK for scanning documents, barcodes, and promotional codes that they can then redeem for promotions. Industries like healthcare, which rely heavily on paperwork, have introduced text extraction methods to automatically capture documents such as insurance forms, doctor's notes, and patient information. Parking authorities use them to identify vehicles by scanning license plates.
As is easy to see, the use of OCR and DMS systems has found its way into a large number of business areas. When it comes to the implementation and management of these systems, companies can either decide to outsource these tasks or develop their own solutions. While in-house solutions and capabilities can certainly be built, BPO has some significant advantages that should first be weighed against those of in-house development.
Benefits of outsourcing document processing
Before we get into the benefits of outsourcing document processing, it must be said that modern OCR software is an increasingly complex technology. This has to do with the fact that the application of methods such as machine learning and deep learning with advanced architectures embody significantly more complexity than conventional technologies in order to recognize letters, digits and other characters and classify them semantically. In addition, there is the fact that every type of document is different, i.e. a different collection of information and regularities, although these can vary greatly from country to country. Even state-of-the-art technologies often have difficulties with the correct execution of their job without a corresponding copy. The supervision and post-processing of operators is therefore not only useful in order to be able to guarantee quality assurance, but also necessary in order to extract the correct data from a document in edge cases. In comparison with traditional approaches, however, a sustainable benefit is that this human-robot collaboration can teach the machine new skills, which means that it increasingly requires less human intervention. In economic terms: there is potential for substantial cost reductions over time.
Due to the high complexity of document extraction systems, the development, adaptation and expansion of a robust system is often time-consuming and requires dedicated specialist knowledge. Something that conventional BPO usually doesn't have. With Parashift we offer exactly that - a team consisting of physicists, mathematicians, developers and specially trained operators as well as state-of-the-art OCR software that can keep up with the old-fashioned industry standard after only one year on the market and is already ahead in some areas. And just ... Parashift's software learns daily on the basis of all processed and annotated documents, which always benefits all customers. With this approach, we promise to be able to tackle the last mile in the extraction problem successfully and not have to stop at a customer project with 95% extraction accuracy on vendor invoices because the investment requirement increases exponentially. Rather, we share development costs and learning effects with all of our customers and take a path that was previously inaccessible and reveals an x-fold of ROI.
Parashift not only gives your company access to top-notch OCR software with relatively non-existent entry barriers, because with Parashift you can also start purely transaction-based, but you can also directly outsource the entire post-processing of the OCR extraction results. By outsourcing these tasks, including the sustainable improvement of your OCR software, you can concentrate on your core business instead. Instead of providing significant internal resources, you can use them for purposes for which the generation of values is significantly higher and, in particular, aligned with your company strategies. In other words, you have more capacities and resources to expand your competitive advantage.
You clearly benefit from the classic advantages of a BPO: effectiveness and efficiency gains, flexibility and sustainable process improvements. However, since this model is combined with that of a dedicated technology provider who focuses on a well-defined problem, in our case the classification and data extraction of documents, these effects have a significantly greater impact over time. This is because the work component of the BPO, i.e. the post-processing of the extraction, Parashift serves as a training basis for improving extraction technologies and can be imported directly, which makes it possible to offer higher data quality for cheaper money. Therefore, more and more companies from all over the world will want to process documents with Parashift. The logical consequence is a high-performance technology that will at some point be able to process the majority of the daily incoming mail of any company autonomously. And all for a marginal monetary amount.
Would you like to find out more about how we can support you in handling your documents or how the Parashift platform can be integrated into your business processes? We recommend that you arrange a free online demo with one of our product specialists. Alternatively, you can also send us an email with your questions or simply call us directly on +41 61 508 77 77. We are pleased to meet you!
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