AI data entry: Everything you need to know in 2024

Organizations across the world operate on data insights but this data is often locked in physical documents. This data needs to be converted into the digital format to be able to draw insights from it. That’s what data entry is all about. It involves manually entering relevant and selective data points from physical documents into a digital format which is not only easily accessible but also modifiable, such as databases or spreadsheets. It is a crucial task which if performed traditionally, can be tedious, time-consuming and resource-intensive. Given the latest advancements in Artificial Intelligence (AI) and Machine Learning (ML), this process can be optimized. Automated data entry is not only critically important but also highly advantageous.

In this blog, we are going to explore and understand what data entry actually is and the challenges faced with traditional methods. We will also explore how to automate it using AI tools, the technology behind them and the various advantages they offer.

Data Entry: Challenges associated with traditional methods

Plainly speaking, data entry is manually entering relevant data points into digitally convenient formats like databases or spreadsheets from physical documents. This data can then be modified to unlock insights which then drive strategic business decisions. 

Data entry is a crucial function for multiple industries like finance, healthcare and e-commerce and yet it struggles with age-old practices that are obsolete, cumbersome and inefficient. It sits on the backend and is often forgotten. There are multiple challenges that these tedious methods face. Let’s take a look at some of these challenges and how we can overcome them using AI-based automation.

Traditional data entry methods were the only choice a few decades ago. With passing time and as technology evolved, there are several improved technologies that can now be used to optimize this process. Before we learn how we can automate traditional data entry, we must first understand the multitude of challenges that plague these methods and hinder efficiency and accuracy:

1. High Error Rates

Manual data entry is prone to human errors such as typos, misinterpretations, and incorrect data input, which can lead to inaccuracies and require time-consuming corrections. Effective manual data entry requires skilled personnel, and turnover or lack of training can affect data quality and process efficiency. Variability in data entry practices and formats can lead to inconsistent and incompatible data, complicating data integration and analysis.

2. High Costs

The need for manual labor and potential overtime increases operational costs. With manual data entry, complex data structures or formats can be challenging to handle which results in snowball effects. Handling sensitive data requires nuanced data entry operators which typically have high costs attached with them. Additionally, correcting errors and reconciling discrepancies adds to the expense. 

3. Time-Consuming and lack of real-time analytics

Entering data manually is labor-intensive and slow, especially when dealing with large volumes of information, which can delay processing, analytics and reporting. While employing such methods, there is a competitive disadvantage at play. Manual data entry does not support real-time updates, resulting in outdated information and delayed decision-making. There are faster methods easily accessible that your competitors can take the advantage of. With faster processing, they can pinpoint their shortcomings and improve, understand market trends and have the first-mover advantage, etc. 

4. Limited Scalability

Manual data entry faces significant scalability issues as data volumes grow. As the amount of data increases, manual processes become increasingly inefficient and prone to errors, resulting in slower processing times and greater strain on resources. Scaling up requires additional personnel and time, which can lead to higher operational costs and potential delays. Furthermore, the complexity of managing larger datasets manually can overwhelm existing systems and processes, hindering overall efficiency. Automated data entry solutions offer greater scalability by handling increased volumes with minimal additional effort and maintaining accuracy and speed.

5. Security Risks

Manual data entry introduces several security risks, primarily due to the increased chance of human error and lack of stringent controls. Sensitive information can be exposed to unauthorized access if physical records are not properly secured or if data entry personnel do not follow strict privacy protocols. The manual handling of data also raises the risk of data breaches, especially if data is transmitted or stored without encryption. Furthermore, inconsistencies in data entry can lead to gaps in security measures, making it difficult to maintain comprehensive audit trails and detect potential threats. Adopting automated systems with built-in security features can help mitigate these risks and enhance data protection.

Now that we have a comprehensive understanding of the challenges associated with manual data entry, let’s take a look at how to overcome them. Addressing these challenges typically involves adopting automated data entry solutions that improve accuracy, efficiency, and scalability. But that begs the question, can AI tools help with data entry?

How can AI tools help with data entry?

Can AI tools help with data entry? Yes, 100%. There are several vendors in the market today that offer elegant AI-powered solutions that can help with automating mundane data entry tasks. Not just that, they go one step further and automate entire workflows. They are advanced, powerful and intelligent enough to import documents, extract the relevant data points, run validations, approval workflows, formatting actions and then seamlessly export the entire extracted data into a database or a third-party software, all of this in a matter of a few clicks and minutes.

Sounds impossible, right? Well, it is made possible by a combination of multiple advanced technologies that we will be reading about in the section that follows.

AI-based data entry automation tools leverage several advanced and sophisticated technologies to automate and enhance the data entry process. A summarized look at some of these technologies and the key functions they play can help deepen our understanding of how data entry automation works and how to utilize these to optimise daily workflows:

Optical Character Recognition (OCR)

Technology: OCR technology converts different types of documents, such as scanned paper documents, PDFs, and images, into editable and searchable data. It can recognise scanned or handwritten data from different documents, like Invoices, Receipts, Expense Reports, Forms, etc. It uses pattern recognition and machine learning algorithms to identify and extract text from images.

Function: OCR scans the document, detects characters and words, and translates them into digital text. Advanced OCR systems also handle various fonts, languages, and handwriting.

Natural Language Processing (NLP)

Technology: Natural Language Processing (NLP) involves the use of machine learning and linguistics to understand and process human language. It helps AI tools interpret text, extract meaningful information, and automate text-based tasks.

Function: NLP enables AI systems to understand context, semantics, relationships and intent behind the text. It is used for tasks such as categorizing data, extracting entities (names, dates, etc.), and summarizing content.

Machine Learning (ML)

Technology: Machine learning algorithms are trained on large datasets to recognize patterns, make predictions, and improve over time. Techniques such as supervised learning, unsupervised learning, and reinforcement learning are commonly used.

Function: ML models can learn from historical data to predict and auto-complete data fields, detect anomalies, and refine their accuracy as more data is processed. They adapt and evolve based on new inputs and feedback.

Deep Learning

Technology: Deep learning is a subset of machine learning that uses neural networks with multiple layers (deep neural networks) to analyze complex data patterns. Techniques like convolutional neural networks (CNNs) and recurrent neural networks (RNNs) are commonly used.

Function: Deep learning enhances the accuracy of tasks such as image recognition and text analysis. For instance, CNNs are used for OCR to better interpret visual data, while RNNs and transformers improve NLP tasks by understanding context and sequence in text.

Pattern Recognition

Technology: Pattern recognition involves identifying and classifying patterns in data using algorithms. It is integral to tasks such as detecting key elements in documents or recognizing specific data structures.

Function: AI tools use pattern recognition to classify data fields, identify recurring elements, and extract structured information from unstructured sources, such as forms and receipts.

Cognitive Computing

Technology: Cognitive computing aims to simulate human thought processes using AI technologies. It includes techniques such as knowledge representation, reasoning, and learning.

Function: Cognitive computing helps AI systems understand and process complex data by emulating human-like reasoning and decision-making. It is used for advanced data analysis and interpretation tasks.

By combining these technologies, AI-based data entry tools can import your documents, understand your data, extract the points you want and seamlessly integrate and export the extracted data to a database of your choice. This enhances efficiency, accuracy, and scalability in data processing multifold, transforming traditional methods and addressing many of their limitations.

Benefits of AI-based data entry

Embracing AI-driven data entry automation offers a transformative advantage for organizations by revolutionizing how data is processed and managed. Traditional data entry methods often involve laborious manual input, leading to inefficiencies, errors, and scalability issues. AI automation addresses these challenges by streamlining data entry processes, which can lead to significant improvements in various aspects of organizational performance. Here’s how implementing AI-based solutions can benefit your organization:

Reduced Errors and Improved Accuracy

AI systems excel in reducing the human errors that often plague manual data entry. By utilising sophisticated algorithms and machine learning techniques, automated data entry systems ensure a higher level of precision. This results in improved data quality and integrity, reducing the likelihood of inaccuracies that can impact decision-making and operational efficiency.

Reduced Costs and operational overhead

Automating data entry tasks means fewer human resources are needed to handle these repetitive tasks. This can lead to a reduction in the number of data entry clerks or administrative staff required. AI systems work continuously without the need for overtime pay, reducing additional labor costs typically incurred during peak periods or extended hours.

By automating data entry, organizations can streamline their operations, reducing the complexity and number of manual processes. This simplification leads to lower operational overhead as fewer resources are needed to manage and supervise data entry tasks. Automation minimizes human errors that lead to costly corrections and rework. The reduction in errors means fewer resources are needed for quality assurance and data correction, resulting in cost savings.

Improved Financial Management

AI-based systems often involve a predictable cost structure, such as subscription fees or licensing costs, rather than variable labor costs. This predictability helps in budgeting and financial planning. In many cases, cloud-based AI solutions eliminate the need for extensive on-premises infrastructure, such as servers and maintenance, further reducing capital expenditures.

Enhanced Scalability and Speed 

AI-powered data entry solutions are designed to manage and process large volumes of data swiftly and efficiently. As your organization grows and data demands increase, these solutions provide the scalability necessary to handle expanding workloads without causing delays or creating bottlenecks. This ensures that data is processed promptly and effectively, regardless of scale.

Increased efficiency

Automating data entry tasks with AI can dramatically cut down the time and resources needed for data processing and input. This enhanced efficiency enables employees to redirect their focus towards more strategic and high-value activities, thus boosting overall productivity and allowing your organization to achieve more with fewer resources. 

Improved Data Security and Compliance

Integrating AI into your data entry processes can significantly bolster data security and compliance. By reducing the manual handling of sensitive information, AI systems lower the risk of data breaches and ensure adherence to regulatory requirements. Enhanced security features and automated compliance checks help protect valuable data and maintain industry standards.

Implementing AI tools for data entry

There is no general rule for implementation of an AI-based data entry tool. There is no one-size fits all solution here. While there is a general consensus about the efficacy of these tools, the right fit can vary based on your organization. Hence, we will be looking at a step-by-step guide on how you can determine your needs and select the right tool for yourself. We will also take a look at how we can implement such tools.

Step 1: Assess your needs and goals

To start, we can take a look at our existing processes and determine the specific data entry tasks that need automation, such as invoice processing, form filling, or data extraction from documents. Once we have defined our needs, we need to clearly outline what we aim to achieve with AI automation, such as improved accuracy, faster processing times, or reduced manual labor.

Step 2: Choose the right AI tool

Next, we need to research and compare different AI-based data entry tools based on features, scalability, integration capabilities, and user reviews. Popular options include tools with OCR, NLP, and machine learning capabilities. Choose a vendor or solution that aligns with your requirements and budget. Consider factors like support, updates, and the ability to handle the specific types of data you work with. 

Read: Top Data Extraction tools in 2024

Step 3: Plan for integration

Once we land on the right tool that fits our requirements and budget, we need to ensure the AI tool is compatible with our existing systems, such as ERP, CRM, or document management systems. Check for available APIs or integration connectors or talk to your PoCs with the vendors. Get a detailed understanding of how data will flow between the AI tool and your systems. Define data input sources, processing steps, and output destinations. Ensuring clear and transparent communication with the vendor is essential in this step.

Step 4: Prepare your data, configure and customize the tool to your needs

Usually, vendors have onboarding teams to assist with these steps but it requires involvement from the customer as well. A few basic measures can be adopted like cleaning and standardizing your existing data to ensure the AI tool can process it accurately. This may involve correcting errors, removing duplicates, and formatting data consistently. If the AI tool requires training, prepare a dataset of sample documents or data entries to train the system effectively. 

Next, we need to install and configure the AI tool according to your needs. This may involve setting up data extraction parameters, defining workflows, and customizing templates. Tailor the tool’s settings to fit your specific use cases, such as defining the types of documents it should process, the data points it should extract or setting up rules for data validation.

Step 5: Train and test the AI tool

Some vendors offer pre-trained AI models adept in extracting specific data points from your documents. Let’s say, you are setting up an AI tool to extract Invoice number, due date and amount. This can be achieved with pre-trained offerings or custom modes trained specifically to extract data from your documents. In case of the latter, we would need to train the AI tool using our data to improve its accuracy and performance. This may involve supervised learning, where the system learns from labeled data, or fine-tuning pre-trained models. This is followed by thorough testing to ensure the tool performs as expected. Once this step is completed, we can test with different types of data to validate accuracy, speed, and reliability.

Step 6: Implementation, monitor and team training

Once we are satisfied with the way the tool works, we can gradually implement the AI tool in a live environment. We need to start with a pilot phase to address any issues before a full-scale rollout and continuously monitor the tool’s performance and accuracy. This can be achieved by setting up regular reviews and metrics to track improvements and identify areas for adjustment.

There needs to be some form of training for your staff on how to use the new tool effectively. This includes understanding its features, handling exceptions, and managing the tool’s outputs. The vendor usually helps out with this. They ensure ongoing support and resources available for users to troubleshoot issues and optimize the use of the purchased or licensed AI tool.

Step 7: Evaluate and Optimise while ensuring compliance and security

As the team gets used to using the AI-based tool, we also need to regularly evaluate the tool’s performance against our predefined goals. Some of the areas for evaluation of the tool’s performance can be improvements in efficiency, accuracy, and cost savings. We can optionally, based on performance data and feedback, make necessary adjustments to improve the tool’s effectiveness. This may involve re-training models, updating configurations, or integrating additional features.

Since AI tools operate on feedback, sometimes it becomes important to implement measures to protect sensitive data processed by the AI tool. We need to ensure that data handling complies with relevant regulations and standards. We need to review compliance with industry standards and legal requirements to maintain data privacy and security.

Conclusion

In summary, while the pace of implementation depends on the scale of deployment, AI-driven data entry automation can effectively circumvent challenges in traditional methods of data entry. Such tools not only streamline and optimize data processing but also enhances accuracy, scalability, and security, leading to more efficient and secure data management practices across the organization.

The outlook for data entry automation driven by AI is optimistic. With continuous advancements in AI, we are on track to see the emergence of increasingly sophisticated tools and algorithms that will enhance and streamline data entry tasks. Moreover, the convergence with cutting-edge technologies such as robotic process automation (RPA) and intelligent document processing (IDP) promises to amplify these automation capabilities, pushing the boundaries of efficiency and resource optimisation.