Intelligent Document Processing (IDP) Adoption Swells as Enterprises Seek to Lower Costs Through Automation; IDP Market to Grow 55-65% in Next Year—Everest Group
IDP vendors are expected to offer more out-of-the-box, pre-trained IDP solutions to meet the demand for faster ROI and quicker deployment
The global market for Intelligent Document Processing (IDP), estimated at US$700-750 million in 2020, is expected to grow at a rate of 55-65% over the next year, according to Everest Group. Cost impact is now the key driver for IDP adoption as enterprises seek to realize tangible benefits from the technology, closely followed by improving operational efficiency and productivity.
IDP solutions automate the processing of complex documents with accuracy. These solutions blend the power of artificial intelligence (AI) technologies to efficiently process all types of documents and feed the output into downstream applications. Optical character recognition (OCR), computer vision, machine learning (ML) and deep learning models, and natural language processing (NLP) are the key core technologies powering IDP capabilities. The most common use cases of IDP solutions are invoice processing, Know-Your-Customer (KYC) information, insurance claims, patient onboarding, patient records, proof of delivery and order forms.
Enterprises seeking to leverage IDP technology should seek an enterprise-grade IDP solution comprising the following capabilities:
- 1. Training the software: The underlying AI/ML model of an IDP solution has to be trained with sample documents to accurately extract data.
- 2. Data extraction and classification: Core IDP capabilities include techniques to extract data from structured, semi-structured and unstructured documents; classification of documents; support for a range of languages; and product configurability.
- 3. Interoperability: Integration with enterprise applications—such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems—and complementary technologies, including Robotic Process Automation (RPA) and cloud, are needed for data ingestion and enabling broader automation.
- 4. Monitoring and security: Key capabilities include monitoring the performance of the software and users; assessing the accuracy of algorithms for various document types and drawing insights; and ensuring confidentiality of sensitive data.
IDP solution vendors are heavily investing in technology capabilities as well as expansion of their partner ecosystem. Development trends in IDP products that are delivering benefits to enterprises include the following:
- Extraction capability for a large set of languages, including Asian and Middle Eastern languages.
- Increasing maturity for processing unstructured documents.
- Vertical- and horizontal-specific pre-trained solutions out-of-the-box; app store-like channels for easy access.
- Software-as-a-service (SaaS) offerings of the solution to lower Total Cost of Ownership for enterprises and increase accessibility.
- Increased configurability of platforms to provide greater control to enterprise users.
- Enhanced integration with complementary technology solutions, including RPA, Business Process Management (BPM), and process mining.
- Dedicated mobile applications to facilitate document processing through handheld devices.
- Advanced image recognition and processing capabilities using a combination of computer vision and deep learning algorithms.
- Availability of benchmarking analytics for particular processes such as invoice processing.
These findings and more are shared in Everest Group’s recently published report, “Intelligent Document Processing (IDP) State of the Market Report 2021 – Key to Unlocking Value in Documents.” This report provides comprehensive coverage of the IDP market and analyzes it across various dimensions, such as market size and adoption trends, solution characteristics, product capabilities and trends, buyer satisfaction, vendor landscape, challenges to adoption and future outlook.
IDP Market Adoption Trends
- Banking and insurance continue to be the largest adopters of IDP solutions and account for approximately 30% and 13% of the IDP market, respectively.
- Government and the public sector have shown significant growth in 2020, driven mainly by an increased need to improve efficiency and compliance and reduce dependence on manual processing.
- North America continues to be the largest market for IDP software solutions with over 50% market share, while the Asia Pacific (APAC) market is growing rapidly.
- Adoption of IDP solutions in industry-specific processes, especially in Banking, Financial Services and Insurance (BFSI) and healthcare, observed significant growth.
- Large buyers continue to have the highest adoption; however, small and medium-sized businesses (SMBs) are showing the highest growth rate in the adoption of IDP solutions.