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What Is Optical Character Recognition (OCR): Its Working, Limitations, and Alternatives

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Welcome to the fascinating world of Optical Character Recognition (OCR)! In this digital era, where extracting information from documents and images is crucial, OCR comes to the rescue. Even though OCR is a valuable tool, it's vital to recognize its limitations and understand when it’s better to seek more progressive technologies. So, let's embark on a journey to explore how OCR works, its strengths, limitations, alternative methods, and where it truly shines!

What is OCR?

Imagine OCR as a friendly magician who can do something incredible – it turns scanned documents, images, and even handwritten notes into digital text that you can easily edit, search, and work with. This technology utilizes smart algorithms and machine learning to recognize and interpret the characters found in an image or document. 

Yet, even the most proficient magician has certain tricks that remain elusive. When OCR encounters more complex scenarios, such as intricate handwriting or aged and worn documents, it may struggle to perform effectively. Imagine these instances as the equivalent of a trick card stubbornly refusing to vanish or a rabbit that will not appear from the hat.

However, it's important not to let these challenging scenarios overshadow the abilities of OCR. We'll examine these limitations in greater detail later. For now, let's turn our attention to how OCR works and where it shines best, according to our experience.

How OCR Works

Let's take a closer look at the inner workings of OCR:

  • Preprocessing. Picture this as the makeover stage where OCR software polishes the image to perfection. It enhances the quality, removes any unwanted noise, and fixes distortions to ensure accurate recognition. Imagine giving the image a makeover to make it shine like never before!
  • Text detection. Just like a detective searching for clues, OCR software scans the document or image to uncover the hidden text. Using advanced techniques such as edge detection and contour analysis, it spots those elusive letters that are hiding among the pixels. 
  • Character segmentation. Once the text regions are discovered, OCR breaks them down into individual characters. It's like solving a puzzle, separating each piece to better understand the whole. This segmentation step helps OCR make sense of the text and prepares it for the next exciting phase.
  • Character recognition. At this stage, OCR employs powerful algorithms to analyze each character it has segmented. It uses its powers to decipher the shapes, curves, and patterns of the characters, transforming them into recognizable text. 
  • Post-processing. OCR doesn't stop at recognition. During post-processing, any spelling errors are corrected, and formatting is applied to enhance accuracy and readability. It's akin to giving the text a splendid finishing touch, ensuring its radiance and seamless readiness for immediate use.

Methods of OCR

There are multiple models/approaches that are currently used in OCR:

Basic OCR Techniques

  • Pattern Recognition (Template Matching): In this method, each letter is treated as a pattern and matched against a database of known characters.
  • Feature Detection: In this approach, OCR software decomposes letters into basic features like lines, curves, and intersections.

Advanced Machine Learning (ML) and Deep Learning (DL) Techniques

Newer techniques involve advanced machine learning models and deep learning architectures such as Convolutional Neural Networks (CNNs), Recurrent Neural Networks (RNNs), and Transformers.

  • CNNs: CNNs are widely used in OCR for their ability to effectively process image data, by extracting the hierarchy of high-level features. Although efficient in feature extraction, they lack an inherent understanding of the sequential nature of text. Despite this, they remain commonly used for character, word, sentence or paragraph detection/classification.
  • RNNs: These networks retain a form of memory of previous inputs in the sequence, aiding in the recognition of word context within a sentence or paragraph. This ability is particularly useful in OCR to understand the sequence and relationships between characters and words. However, RNNs tend to struggle with long sequences.
  • Transformers: Transformers mitigate some of the issues associated with CNNs and RNNs. In the context of OCR, they capture the contextual relationship between characters more effectively than RNNs or CNNs. However, they are computationally demanding and require extensive training data.

OCR models can operate at different levels of text granularity or with different structures.

Multiple(Two)-Stage OCR

  • Document/Paragraph Level: Here, the OCR model comprehends and extracts information from the entire document. It identifies different sections, text blocks, columns, tables, images, and their relative positions. DL methods like CNNs are typically used to process the entire image and identify these components. Recently, Transformers have also been utilized for document-level processing due to their superior ability to capture complex dependencies across various parts of a document.
  • Sentence Level: For sentence-level recognition, RNNs(w/wo features from CNNs), due to their sequential nature, have traditionally been used. However, Transformers are now becoming more popular due to their improved handling of long sequences and better context understanding.
  • Character Level (optional): At the character level, OCR models recognize individual characters within words and sentences. Simple machine learning models and feature extraction techniques are traditionally used for character recognition(can be replaced with CNNs).

One-Stage OCR (End-to-End) with Transformers 

In one-stage OCR, the entire process from input to output is handled in a single step. Transformers are especially suited for this approach due to their capacity to understand complex dependencies and their end-to-end operational nature. This means that Transformers can directly convert the input image into the desired text output without the need for intermediate stages or components.

Benefits of OCR

OCR technology offers benefits that streamline document management, enhance productivity, and unlock valuable insights. Let's take a closer look at them.

Effortless efficiency

OCR swiftly transforms printed or handwritten text into easily readable machine formats. It brings efficiency and accuracy in managing data in many cases (but not all, unfortunately).

Time and cost savings

With OCR on your side, you can reclaim precious time and resources. By automating data extraction, you'll slash the need for manual entry, reducing costs and freeing up your team for more important tasks.

Enhanced productivity

OCR solutions handle large volumes of documents with ease, supercharging your productivity. Streamlined workflows and efficient data processing ensure your team can conquer mountains of information effortlessly.

Find and access with ease

OCR turns documents into digital treasures, making the text searchable and easily retrievable. It's a friendly companion for quickly finding specific information, improving accessibility, and powering up your research capabilities.

Seamless integration

With its friendly adaptability, OCR effortlessly becomes a part of existing processes, enhancing operations without disruption.

Limitations that Make OCR Ineffective

Now, as promised, we'll review the limitations of OCR. Take them into account when planning your project, so that you don't employ the technology that won't live up to your expectations. 

Complex document layouts

OCR may stumble when confronted with documents sporting fancy layouts, unique fonts, or intricate formatting. While OCR can identify the text, interpreting the document's structure and design might pose a challenge.  It can result in the loss of important information during the extraction process. 

Recognition of complex document layouts is particularly important in several areas where documents often have intricate structures and diverse formatting requirements. Some key areas include:

  • Financial Services;
  • Legal and Compliance;
  • Human Resources;
  • Healthcare and Medicine;
  • Government and Administration

Limited language support

OCR may encounter difficulties with rare or less widely used languages. First of all, each language has its unique characteristics, such as complex scripts, diacritical marks, and unconventional character shapes. These factors make it a challenge to create OCR algorithms that can accurately interpret and recognize text from all languages universally. 

Another challenge lies in the limited availability of comprehensive training data for less commonly spoken languages or those with a limited digital presence. This hinders the development of robust OCR models specifically tailored for these languages. 

Furthermore, the commercial viability of supporting a wide range of languages also comes into play, as OCR software vendors tend to prioritize languages with larger user bases and higher market demand. As a result, the advancement of OCR technology for lesser-known languages faces significant barriers.

Handwriting recognition

OCR technology struggles with accurately recognizing and deciphering handwritten text. The variability in handwriting styles and quality can lead to errors and inaccuracies in the extracted text.

Poor image quality 

OCR performance heavily relies on the quality of the source image. Low-resolution images, blurred or distorted text, and uneven lighting can negatively impact OCR accuracy, leading to errors in the extracted text.

Inefficient error correction 

OCR systems may not provide efficient mechanisms for error correction. When mistakes occur during the recognition process, manual intervention is often required, adding extra time and effort to the extraction workflow.

It's important to assess the specific requirements and challenges of a given task before determining the suitability of OCR technology. In some cases, alternative methods or specialized solutions may be more effective for accurate data extraction.

Layout and typographic limitations

It's important to understand that after OCR processes and recognizes a piece of text, it doesn't have any knowledge of the text's spatial layout or its typographic characteristics. As humans read text, they naturally notice elements such as bold or underlined text. Additionally, how the text is positioned on a page is important in the overall interpretation and understanding of the information.

Regrettably, OCR overlooks these nuances. Sure, we get the words effectively transcribed but, when using OCR-based software, we might miss out on the specific presentation and arrangement of those words, both of which may be crucial to grasping the key message of the text.

That's why OCR-free methods can be so valuable. They do more than just capture the text - they also keep the layout and typography intact. This means they can provide a fuller, more accurate picture of the text, including important details that traditional OCR might overlook.

Complicated adjustment for a specific task

Adjusting OCR for a specific task may cause several challenges. Apart from image quality, lighting and resolution, it is crucial to choose the correct OCR engine and configure it properly. Finding optimal parameters for the given task may be a challenging process and require a lot of experimentation. Additionally, OCR may fail on certain cases not covered during preparation of training data and require special training of the whole system, which may be infeasible for a lot of users.

Is There an Alternative?

Imagine you need a data extraction solution that effortlessly works with multiple languages, different layouts, or even pictures of low-quality. We've had such projects at Tensorway, and we are happy to share how we resolved these challenges. Understanding the limitations of traditional OCR solutions, our AI engineers have taken a different approach. 

Let us give you an example of our data extraction solution that goes far beyond OCR limitations to deliver accurate and reliable results. Watch this video to see how it works in our demo, or keep reading for details:

We've delivered a data extraction solution that processes documents in 4 simple steps:

  1. Uploading: We've made document uploading a breeze! Our versatile model supports a wide variety of formats, making it effortless to extract crucial data from different file types.
  2. Extraction: Sit back and let our solution do the heavy lifting! Our advanced model is designed to extract important information from documents with diverse layouts and languages. Whether it's ID cards, invoices, contracts, or anything else, rest assured, our solution has you covered.
  3. Verification: We value efficiency and accuracy. Before extracting information, you can conveniently verify if an uploaded image is indeed a document. This smart step helps prevent any misuse of the model, saving you valuable time and resources. It's especially beneficial for solutions under heavy loads.
  4. Export: The extracted information is at your fingertips! Easily export the data to your desired format. This crucial feature eliminates the need for manual data entry into different formats, saving your business significant time and effort.

Our software takes a comprehensive approach to ensure accuracy and effectiveness. These capabilities would be impossible with OCR since our solution works easily even with low-quality images and multiple languages.

How do we make it possible? Let's explore the key stages we follow to ensure a seamless and reliable experience:

  • Data preparation: We take great care in handpicking and labeling a diverse dataset of documents to train our machine learning algorithms. This training helps our software recognize text with impressive accuracy.
  • Training and validation: Our algorithms undergo rigorous training and validation processes, continuously adjusting their parameters to achieve optimal accuracy levels.
  • Deployment: Once trained, our software takes the stage in a production environment. It smoothly integrates with other systems, effortlessly handling large volumes of data.
  • Monitoring and maintenance: We don't stop at deployment! We tirelessly monitor and maintain our data extraction software to ensure it remains accurate and effective over time. If your data changes and the software's predictive power wanes, we can detect it and adapt the model to handle new cases effectively.

Our approach stands out when compared to the OCR approach, but OCR is still widely used. Let's review the most common use cases.

Where OCR Can Be Used

Despite the limitations of traditional OCR, it's important to note that there are scenarios where OCR proves efficient enough for the task.

Data extraction from forms

OCR could be a choice when it comes to extracting data from structured forms like surveys, applications, and questionnaires. By automating the capture of data from these forms, OCR software saves time, minimizes errors, and streamlines data processing workflows, making it an essential tool for businesses dealing with high-volume form processing.

Information retrieval from books 

By scanning and converting printed text into machine-readable formats, OCR allows users to search for specific keywords, retrieve relevant information, and engage in digital research effortlessly. This has opened up new possibilities for researchers, students, and avid readers in their quest for knowledge.

Data extraction from ID documents

OCR is used in identity verification processes, such as passport scanning, driver's license recognition, and ID card processing. By automatically extracting pertinent data from ID documents, OCR streamlines onboarding procedures, enhances security measures, and improves the overall customer experience in various industries, including travel, hospitality, and finance.

Automatic data entry in retail and e-commerce

OCR automates data entry in retail and e-commerce by extracting info from catalogs, barcodes, and price tags, simplifying inventory management, pricing, and online listings. This ensures accurate, current product databases, improving the customer shopping experience.

Enhancing customer service and support

Using OCR technology, customer service can swiftly process customer incoming letters, emails, and other customer correspondence by auto-extracting key information, thus ensuring faster responses and personalized interactions. This enhances customer satisfaction. Nevertheless, document quality and language complexity can affect OCR effectiveness.


OCR is a great technology that empowers businesses and individuals to convert physical documents and images into searchable and editable text. While OCR has its limitations, alternative methods like the Tensorway approach provide solutions to address these shortcomings by considering multifactorial aspects. We hope that by understanding the strengths and weaknesses of OCR and exploring alternative methods, businesses can make informed decisions about their data extraction needs. 

Just avoid using OCR when dealing with handwriting, low-quality pictures, unconventional fonts, or complex layouts are crucial for your project's success.

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