The Evolution of Order Processing: From Manual Methods to Cutting-Edge AI

Order processing has undergone a remarkable transformation over the years. Technological advancements have continuously evolved to meet these demands as businesses strive for greater efficiency and accuracy. In this blog, we'll explore the history of order processing, the various technologies that have been employed, and how VAO is setting new standards with AI-driven innovation.

Manual Order Processing: The Early Days

In the early days, and still in many companies today, order processing was entirely manual. This involved physically recording orders on paper, manually checking inventory and processing payments by hand. Manually processing an invoice could take upwards of a week. A survey by Aberdeen Group found that the average time to process an invoice manually is 8.8 days. While simple and straightforward with minimal initial investment, manual order processing was time-consuming and labor-intensive. It was also highly prone to human errors and difficult to scale as business demands grew. Human error rates in manual data entry ranged from 10-30%, leading to significant downstream issues, such as incorrect billing, reporting errors, and regulatory non-compliance.

Benefits of Manual Processing:

• Flexibility: Can handle varied tasks and adapt to changes easily.
• Human Judgment: Applies human judgment and intuition where needed.
• Skill Utilization: Utilizes human skills such as creativity and problem-solving.

Downsides to Manual Processing:

• Speed: Slower compared to automated processes, especially for repetitive tasks.
• Error-Prone: Prone to errors due to human factors such as fatigue and distraction.
• Scalability Issues: Difficult to scale effectively with increasing workload.
• Cost Over Time: This can become costly in the long run due to labor costs and inefficiencies.
• Auditability: Tracking and auditing tasks manually can be challenging.

OCR Technology: A Significant Advancement

The introduction of Optical Character Recognition (OCR) technology marked a significant advancement in order processing. OCR converts different types of documents, such as scanned paper documents, PDFs, or images captured by a digital camera, into editable and searchable data. This technology reduced the need for manual data entry, sped up data processing, and improved accuracy over manual methods. Manual data entry could only handle an average speed of 15-20 words per minute (wpm), whereas OCR could process 1,000 pages per hour. OCR was popular in the healthcare sector, seeing a 30-40% reduction in manual data entry tasks. However, OCR faced challenges with poor-quality documents and was limited to structured formats, requiring significant setup and maintenance.

Benefits of Optical Character Recognition (OCR):

• Automation: Converts physical documents into editable and searchable digital files.
• Accuracy: Provides high accuracy in text recognition and extraction.
• Productivity: Saves time by eliminating manual data entry tasks.
• Integration: Can integrate with other systems for streamlined workflows.
• Accessibility: Makes documents accessible to those with disabilities.

Downsides to Optical Character Recognition (OCR):

• Quality of Input: Accuracy can be affected by the quality of the scanned document.
• Formatting Issues: May encounter difficulties with complex layouts and fonts.
• Language Limitations: Performance can vary across different languages and scripts.
• Initial Investment: Costs associated with acquiring OCR software and hardware.
• Maintenance: Requires regular updates and maintenance to ensure optimal performance.
• Cannot handle exceptions: OCR technology can easily get stuck because it does not comprehend the context and logic of the business.

Robotic Process Automation (RPA): A Step Further

Robotic Process Automation (RPA) took order processing a step further by automating repetitive tasks by mimicking human actions, such as reading and entering data from various sources into systems. RPA reduced operational costs by 30-50%. RPA proved highly efficient for repetitive tasks, reduced human error, and freed up human resources for higher-value activities. Companies reported a 25-30% increase in employee productivity after implementing RPA. However, RPA was limited to rule-based tasks, could be complex to set up and maintain, and struggled with unstructured data. The initial implementation of RPA was costly, including software licensing, infrastructure setup, and consulting fees. Gartner reports that initial setup costs can range from $50,000 to $250,000 per bot.

Benefits of Robotic Process Automation (RPA):

• Efficiency: Automates repetitive tasks accurately and quickly.
• Cost Savings: Reduces operational costs by minimizing human intervention.
• Integration: Can integrate with existing systems without major changes.
• Scalability: Scales easily handle increased workloads.
• Error Reduction: Reduces errors associated with manual data entry.

Downsides to Robotic Process Automation (RPA):

• Limited Cognitive Abilities: Cannot handle tasks that require complex decision-making.
• Initial Setup: Requires upfront investment in setup and customization.
• Maintenance: Regular updates and maintenance are necessary.
• Compatibility Issues: May face integration challenges with legacy systems.
• Security Concerns: RPA bots can pose security risks if not properly secured.
• Cannot handle exceptions: RPA technology can easily get stuck because it does not comprehend the context and logic of the business.

Artificial Intelligence (AI): The Latest Leap Forward

The latest leap forward in order processing technology is Artificial Intelligence (AI). AI technologies now enable systems to automatically interpret and process orders across diverse formats, including PDFs, emails with free-flow text, and multiple languages. This capability extends to handling both unstructured and structured data seamlessly, significantly reducing processing time by up to 93% and cutting operational costs by 86%. These AI-driven solutions integrate seamlessly with existing workflows, continually learning and adapting to meet evolving business requirements, thereby enhancing efficiency and scalability across industries.

Benefits of Artificial Intelligence (AI):

• Automation: Can automate complex tasks and processes.
• Decision Making: AI can make data-driven decisions quickly.
• Scalability: Scales well with large datasets and tasks.
• Personalization: Enables personalized user experiences and recommendations.
• Predictive Analytics: Can predict outcomes based on historical data.
• Configurable Business Logic: Configurable AI solution handles any business exception or rule for specific order processing needs.

Downsides to Artificial Intelligence (AI):

• Cost: Initial setup and maintenance costs can be high.
• Complexity: Developing and deploying AI solutions requires specialized skills.
• Data Dependency: This relies heavily on the quality and quantity of data.

VAO: At the Forefront of Order Processing Technology

VAO is at the forefront of order processing technology, evolving to incorporate the latest advancements in AI. By leveraging generative AI, VAO automates data extraction with higher accuracy and speed, transforming the order processing landscape. Key features include multi-format and multi-language support, integrated mailbox monitoring, seamless system integration, and real-time error reduction.

The Future of Order Processing

As AI continues to advance, we can expect more sophisticated capabilities in order processing, such as enhanced predictive analytics, improved natural language processing, and deeper integration with enterprise systems. These trends will further enhance the ability to streamline order processing, ensuring businesses remain competitive in a fast-paced market.

Significant milestones have marked the evolution of order processing technology, each bringing greater efficiency and accuracy. From manual methods to OCR, RPA, and now AI, the journey has been transformative. AI-driven solutions stand at the cutting edge, revolutionizing order processing, and making it faster, more accurate, and more efficient than ever before. As we look to the future, continuous innovation will ensure that these technologies remain leaders in this ever-evolving field.

References

Aberdeen Group, "The Hidden Costs of Manual Invoicing," 2021. Deloitte, "The ROI of Robotic Process Automation," 2020. Gartner, "Market Guide for Robotic Process Automation Software," 2020.

Author:

Gagan Bhasin

Founder & CEO

VAO Labs

www.vao.world