Optical character recognition (OCR) technology is certainly a mouthful to pronounce, but the concept itself is quite simple. Software that utilizes this technology has the ability to convert printed or written text from images and scanned documents into online, machine-readable text. The online form of this text can then be searched, edited, accessed, or repurposed for the sake of data processing without the need to edit and rescan physical copies of the original documents. This is an extremely useful tool for the contract lifecycle management (CLM) branches of any organization, as it has the potential to cut down on wasted time and resources while also speeding up the individual contract processes.
In this article, we will take a look at the various applications of OCR for businesses operating in any field, with special attention to how it may be used in the context of CLM, as well as the prospective benefits of utilizing this helpful software.
Applications of OCR Technology Software
Before we dive into the unique benefits of OCR technology, we first must consider how this type of software can be applied in any organization, especially to help with contract management.
The first major application of OCR software is retrieving the correct documents or information quickly without having to search through physical archives. OCR technology converts these physical copies into digital ones, making it much easier to search for and locate the exact receipt, invoice, or contract you need without wasting the time to manually look through physical or digital files. This means you can also easily bring up any past versions of the document as well as related documents that may be useful in the current task.
Contract management often requires employees to keep up with multiple versions of a contract being relayed back and forth during negotiations. Being able to search archives that have all the versions, both old and current, of a contract makes it much easier to keep track of changes and locate other contracts that may be helpful in the editing or negotiation process. These archived contracts often contain language that can be used as either a blueprint for authoring the current contract or an indication of problematic clauses to avoid. In both cases, contract management employees benefit from the ability to quickly search up and reference these documents as well as other documents pertaining to the relationship with a client.
Another helpful way to employ OCR software is in the editing of documents. By making previously image-based files text-based and machine-readable, OCR technology makes mass editing of many documents at once a breeze to handle. Rather than having to fix or recreate the physical document and scan it into the computer again, you can simply make edits directly on the digital form of the document provided by the OCR software. This makes the search and replace method of mass-editing many documents much easier as well, with hundreds of corrections being made simultaneously that would normally have taken hours to correct by hand.
Editing is a major part of the contract management process, especially during client negotiations. As negotiations occur and changes are discussed, these edits need to be made in real time so that everyone involved in the negotiations remains on the same page, even if they’re operating out of different locations. By editing the text of the documents directly online, you can skip the time-wasting steps of making and rescanning hand edits and avoid miscommunications caused by the distribution of unrevised versions of the contract.
An essential feature of OCR technology software that may go overlooked is the ability to repurpose the language of archived documents. As the images are converted to text, this text becomes available for distribution to other online systems. Therefore, the language utilized in one document can be easily transferred to a new document of a similar nature, cutting out the need to search up and copy the original document or to write entirely new language.
Repurposing language is an extremely useful method in contract management for the standardization of contracts as well as an increased pace in contract authoring. If you are authoring a contract that is similar to a past contract, you can extract the language of the past contract and utilize it in the creation of the newer contract, resulting in much more uniform agreements. Having an archive of clauses also makes the editing process for contracts much faster by providing prewritten clauses that can be chosen and adjusted slightly to fit the new terms required by the client relationship without having to waste time writing brand new clauses.
Benefits of OCR Technology Software
Now, let’s take a look at some of the benefits of using OCR software, paying particular attention to its effect on the contracting process.
Cut Back on Waste
Waste can take many different forms within an organization. Wasted time and resources may quickly lead to a drop in productivity and profits alike. OCR technology helps cut back on this waste by eliminating the need for both completion of tedious manual tasks and physical storage of documents. Manual data entry can be a very time-consuming process, eating into valuable moments that employees could spend on much more pressing matters, such as interacting with clients, making contract revisions, or following new leads. OCR software takes care of data entry for you, freeing up more time for employees and cutting back on some of their more mundane tasks.
Converting from image-based to online text-based documentation also cuts back on the need for physical storage space. Gone are the days of overflowing filing cabinets that take up valuable space in the office. Instead of being cluttered with hundreds of documents, that area can be repurposed for another type of storage or for employee space. Uploading documents to one unified archive creates a much more centralized and secure workspace as well, lowering the risks of losing valuable data to fires, break-ins, or any other sort of disaster.
The manual input of data from physical documents to online archives will inevitably result in some level of human error. A good OCR technology software reduces that error immensely, with the software accurately converting image-based documents into text-based files in a quick, standardized format. Not to mention, by automatically updating the archives with new documents each time they are created, you can ensure that both employees and clients alike always have access to the newest versions of documents and the most current information on any given topic, reducing the risk of miscommunications and errors caused by slow or inaccurate data entry.
One of the best ways to improve client relationships and increase revenue is to speed up your company’s CLM processes. OCR technology software provides several methods to accelerate the various processes that occur throughout the contract lifecycle. The writing and editing processes benefit from the clause library that is created by the repurposed language of old documents. By pulling from standardized language that worked in the past, employees can create and revise contracts much faster without having to constantly come up with new ways of saying statements they may have already adequately written in the past.
Increased accessibility greatly improves the speed of the negotiation process as well. With all the past and current versions of a contract available online for all of the involved parties to see and edit, the negotiation process becomes much less painful. Increased communication means that, regardless of geographical location, everyone can stay on the same page as far as what the terms of the contract need to say and how those revisions can be made in a way that is satisfactory to both sides.