Contracts are an integral part of the business in any organization. Depending on the type of the company and how long the company existed there are several ways contracts would have been created and managed. However, whatever the contract management process that an organization might be adopted, there will be a lot of active contracts that are still written on paper or signed/scanned and stored across document repositories or network drives or any existing contract management systems. Just having these legacy contracts on your systems does not help the organization much as these are non-searchable and hence have incredibly low visibility and also prone to operational risk
Apart from the legacy contracts there are other cases where the contracts are executed outside the organization (for example, executed on third party paper) and are scanned and emailed back to your organization. These contracts are just uploaded into your existing document repository or the contract management system that you are currently using. Still this will not be of much use to the organization as again these documents are non-readable pdf files or images.
So, unless these contract documents are digitized and the key information within the contracts readable and extractable there would not be any benefit for the organization.
Let us try to understand how to digitize these scanned and non-searchable contract documents.
What is OCR (Optical Character Recognition)?
OCR basically refers to Optical Character Recognition which converts pictures of text into readable text files. OCR is helpful when scanned or pictured documents are subjected to the OCR tools which will analyse the input documents and convert them into readable text depending on the quality of the scanned documents.
Some OCR tools come along with de-noising and de-skewing algorithms to improve the quality of the scanned documents before the OCR process is done. This is to ensure that the data conversion percentage is as high as possible
We have different type of OCR tools available out there, some are free tools, and some are products with built-in OCR tools like Adobe cloud or Abby. Free tools are OK for simpler and straight forward documents, but they tend to fail if the documents are complex or have data quality issues. Built-in OCR products are far better than the free OCR tools but again they are not specially designed for contract management needs.
When OCR tools are integrated with Contract management systems or contract analytics platforms then you get the best output from these platforms.
How Smart Contract Analytics Works?
The Smart Contract Analytics platform is primarily built using Artificial intelligence and Machine learning technologies so as to analyze the contract documents with more accuracy.