What Is Data Capture, and Why Do You Need it?

Data capture is a technology designed to extract data from physical sources (analog data), converting it into useful digital information (digital data).

Last updated:
November 30, 2022

In today's business environment, digital transformation is no longer an option — it's a necessity. Businesses must embrace new technologies that enable them to work more efficiently and effectively to be competitive. Data capture and automation are two critical components of digital transformation.

Data capture refers to the process or technologies that help businesses extract certain information from documents or forms to automate various workflows. On the other hand, automation is using technology to automate tasks that you would otherwise perform manually. Data capture and automation can help businesses streamline their operations, improve their bottom line, and better serve their customers.

In this blog post, we'll discuss what data capture is and why businesses need it. We'll then go over the different methods of data capture, including manual and automated data capture. Finally, we'll look at one tool that can help businesses automate the data capture process — FormX.

Let's delve right in!

What Is Data Capture?

Data capture refers to extracting data from physical or digital documents, such as PDFs or images, and converting them into formats that computers can understand. Formats that computers can read include CSV (Comma-Separated Values), XML (Extensible Markup Language), and JSON (JavaScript Object Notation).

In the past, data capture was a manual process. Businesses would have to hire workers to manually input data from paper documents into digital formats. This was not only time-consuming but also error-prone. Even a simple typo could result in incorrect data input into the system, leading to downstream issues.

Now, with more advanced technologies, businesses can automate data capture. Automated data capture uses technology, such as optical character recognition (OCR) and intelligent document recognition (IDR), to extract data from documents automatically. This is a much more efficient and accurate way to capture data, eliminating the need for manual input.

Organizations can use data capture technologies in a variety of ways, such as:

  • Retailers can use data capture to automatically extract data from receipts. This can be used to track customer purchase history and better understand consumer behavior.
  • Financial institutions can use data capture to automate customer onboarding. By capturing data from passports, IDs, and proof of address, banks and insurance companies can quickly and easily verify customer identity.
  • Healthcare organizations can use data capture to streamline patient intake. By capturing data from patient forms, hospitals can speed up the admissions process and reduce paperwork.
  • Governments can use data capture to reduce fraud and speed up the processing of benefits claims. By capturing data from ID cards, birth certificates, and other documents, government agencies can verify the identity of applicants and prevent fraud.
  • Data capture can also extract and digitize data from business certificates. Details such as the company name, registration number, and date of incorporation can be quickly captured and stored in a digital format.

As you can see, data capture has a wide range of applications. It can be used to automate various business processes and workflows, which can lead to increased efficiency and productivity.

Why Data Capture?

In today's digital age, data is more critical than ever before. Businesses rely on data to make informed decisions, enhance operational efficiency, understand their customers, and improve their products and services.

However, a lot of data is still trapped in physical documents and forms. About 80% of data is unstructured, which means it's not in a format that computers can easily analyze. This includes data like emails, images, PDFs, and handwritten documents.

Businesses need to capture this data and convert it into a digital format to unlock its value. This is where data capture comes in.

How to Capture Data?

To better understand how data capture works, we need to look at some of the different methods that businesses use. Here are the two main types:

Manual Data Capture

This is the traditional approach to capturing data from documents. As the name suggests, manual data capture involves manually entering information into a computer system. One has to key in what's captured from the document and do any required validation.

The disadvantages of manual data capture are obvious. Firstly, it is time-consuming. At a time when things move fast and time is of the essence for many businesses, manually entering data isn't feasible.

Secondly, it's prone to data entry errors. Humans make mistakes and often need to go back and re-enter data as a result. This inevitably leads to lost productivity and operational inefficiencies.

Moreover, manual data capture does not scale well. As a business grows larger and processes more documents, this approach quickly becomes unsustainable.

Automated Data Capture

This is the modern alternative to manual data capture. Instead of manually keying in information from a document or form, businesses can use automation software to extract that information automatically. Thanks to artificial intelligence (AI) and machine learning, this software can understand the document's layout and extract relevant data with little human input.

There are different ways to automate capturing of data, including:

Optical Character Recognition (OCR)

OCR entails scanning text within an image or PDF and extracting it. It then converts that text to machine-encoded text. Unfortunately, the information isn't structured, so the results cannot be utilized by a computer.

Intelligent Character Recognition (ICR)

ICR is a more advanced version of OCR. This version can even recognize handwritten characters and extract data from them. However, ICR also suffers from the same issue as OCR in that it can only extract unstructured data.

Intelligent Document Processing (IDP)

Intelligent Document Processing is the most advanced and sophisticated approach to data capture. It utilizes advanced technologies such as artificial intelligence, machine learning, and natural language processing to understand documents and extract data from them.

It can automatically extract data from images, PDFs, and handwritten documents while understanding the context and organizing it into a structured format. This makes it possible to use the data directly for business purposes.

Barcodes and QR Codes

Barcodes or QR codes are often used to store data about a product, such as its price or SKU number. This information can be captured using a barcode scanner and imported into a computer system.

Digital Forms

This method facilitates data capture through web and mobile applications. It is customizable and eliminates the need for paper-based forms. Digital forms offer greater security and privacy, as data is stored electronically and can be password-protected. Additionally, they can be integrated with back-end systems for even greater efficiency.

Digital Signatures

Digital signatures often replace paper-based signatures and can be used to sign documents, contracts, and other legal agreements.

Digital signatures are more secure than traditional signatures, as they cannot be forged. They also provide a record of when a document was signed and by whom, which can be useful for auditing purposes.

Web Scraping

This method involves using bots and web crawlers to search and collect data from the internet. This data can then be transferred to relevant databases for use. The main advantage of web scraping is that it can be used to collect constantly changing data, such as weather data or stock prices.

Voice Capture

Voice capture is a data entry method involving using speech recognition software to convert audio recordings into text. This text can then be transferred to a computer system for further processing.

It can also be used to understand and interpret spoken commands. Apple's Siri, Amazon's Alexa, and Microsoft's Cortana are all examples of voice capture technology.

Many other data capture methods exist, including magnetic stripe cards, Optical Mark Reading, Magnetic Ink Character Recognition, smart cards, video/image capture, and more. However, these are the most common methods used today.

Benefits of Incorporating Data Capture

Investing in data capture in your business can profit your organization in several ways. Here are some of them.

Increased Overall Efficiency

Data capture technology helps businesses improve overall efficiency a few ways. Firstly, it can process documents much faster than manual data entry. After training the extraction models with enough number of samples, automated data capture solutions can quickly read and interpret data from various types of documents. This can free up employees from manual data entry, time that can be used for other tasks that can create even more value than manual data entry.

Secondly, data capture technology is much less error-prone than manual data entry. This is because the technology can read data more accurately and consistently. This can help reduce errors in data entry, saving businesses time and money.

Finally, structured data generated by data capture technology enables the automation of various workflows. This can help businesses automate repetitive and mundane tasks. For example, a data capture system can automatically populate invoices with data from a sales order or even automate account payable processes.

Better Customer Service

Wait times are one of the most common complaints that customers have. This is especially true in customer service-oriented businesses, such as retail or hospitality. Data capture can help to reduce wait times by quickly collecting customer data and transferring it to the relevant system.

For example, a data capture system can retrieve data from IDs and proof of address documents in order to open a new customer account. This can be done in a matter of seconds, rather than the minutes or even hours it would take manually.

Enhance Data Security and Storage

Storing data physically comes with a lot of risks. Physical documents are prone to damage; once they're gone, they're gone for good. There's also the issue of security — unless you have a very sophisticated (and expensive) system in place, anyone can access your physical documents.

Data capture technology helps to solve both of these problems. By digitizing your data, you can create backups and manage access much more easily than with physical documents. This makes your data more secure and less likely to be lost or damaged. In addition, it makes it much easier to track who is accessing your data and when, which enhances security even further.

Real-Time Insights

Data capture technology helps businesses to get usable insights in real time. This allows for better and faster decision-making. For example, retailers can use data capture to gain insights about consumers' purchase behaviors, frequencies, preferences, and more. This information can be used to segment customers and send them personalized recommendations. In this way, data capture technology can help businesses to increase customer loyalty and improve their bottom line.

Capture Data With FormX

FormX is the leading data capture platform, helping businesses automate their data capture and various workflow with little to zero code. We can process various documents, such as invoices, receipts, proof of address, bank statements, etc. Or you can train your own data extraction model by uploading sample images and marking the required data yourself.

FormX has helped various businesses, major shopping malls, real estate, charities, etc., automate data capture and various workflow with little to zero code. With FormX, you can easily and quickly capture data from any document, with high accuracy and efficiency.

Contact us today to learn more about how FormX can help your business.

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Purchase Orders
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Loyalty Members Applications
Annual Reports
Business Certificates
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