Documents are everywhere. Invoices, contracts, and forms, reports, PDFs–whatever. They are used by businesses in their daily operations but accessing useful data in such files remains one of the greatest operational challenges. Have you ever asked yourself why document automation projects occasionally fail or why they do not go as expected? The solution is usually in the parsing approach to be taken.
There are two dominant methods of document parsing in the present: rule-based parsing and AI-based parsing. The two have the goal of transforming documents into structured, usable data, only that they do so very differently. Which one is the right one for your business? We should deconstruct it in a no-frills-barred manner.
What Is Document Parsing Rule Based?
Document parsing with rules is based on preset rules that are developed by people. These guidelines inform the system of where to find information and the way to derive it. An example is always writing the invoice number on the upper right hand side or the total amount should follow the text Total.
Sounds simple, right? And within controlled settings it was very successful indeed.
Pros of Rule-Based Parsing
Predictability is the greatest benefit of rule based parsing. Rule-based systems can be quite precise when the documents are written in the same form. They are simpler to comprehend as well since it is all logic-based and clear.
The other advantage is ease of installation in simple applications. When you are working with one type of document and only one vendor, it is possible to create the rules rather fast and inexpensively. One does not have to train models, or assemble extensive datasets.
Cons of Rule-Based Parsing
In this section the cracks begin to appear. Systems based on rules falter the instant document layouts evolve. A new vendor? A redesigned template? The formatting change of as little as one can violate the rules.
Repair makes a permanent nightmare. Each exemption needs a new rule. Systems in the long run become weak and not scalable. Do you really want to rewrite the rules with the growth of your business?
What Is Document Parsing through AI?
AI-based parsing is a system that is based on machine learning and natural language processing to comprehend the documents in the manner humans do. AI is able to learn patterns in data and adapt to changes as opposed to strict rules.
This is where ai document parsing truly changes the game. Instead of using the question, where can the data be found? AI: What does this data mean?
Pros of AI-Based Parsing
The greatest advantage is flexibility. AI is able to deal with various layouts, formats, languages and even scans that are messy. AI is flexible, whether it is a handwritten form or a multi-page legal contract, it is not rewritten every time.
Accuracy improves over time. The smarter the system is, the more documents it is processing. It is why AI-based parsing is suitable for companies that have large volumes and diversity of documents.
The other significant win is in scalability. After being trained AI systems can process thousands of documents, or even millions of documents, without the need to add new manual rules. That saves a lot of time, does it?
Cons of AI-Based Parsing
AI isn’t magic. It involves quality data to train. First configuration may require more time than straightforward rule-based systems, in particular when labeling of data is required.
It is also perceived to have black box-behavior. The decisions made by the AI are not always as transparent as the rules, and it may raise concerns among the teams working in the regulated fields. Nevertheless, the current platforms are enhancing explainability at an alarming rate.
True vs. Adaptable
Systems of rules are excellent in circumstances where there is consistency. AI-based systems are the best in dynamic ones. It does not matter which one is better in general, it is the one that suits your reality.
When your documents seldom change and that accuracy should be deterministic, then you might be able to get by with rules. However, when you have to deal with multiple vendors, international formats, and changing templates, AI is necessary.
This is why many modern businesses adopt ai document parsing to reduce human intervention and error rates while increasing speed.
Cost Issues You cannot avoid
Rule-based parsing might appear to be cheaper. However, the costs of continuous maintenance are soon added. Any variation of a document is a manual process.
AI-based systems would require more initial investment, but are also very large in terms of long-term savings. Less manual correction, less failures, and less processing directly translate to operational efficiency.
The actual question is therefore; do you want short term savings or long term scalability.
Final Thoughts
Document parsing that is controlled by rules and those that are controlled by AI have their respective positions. The rule-based systems are simpler to use and have control, whereas AI-based solutions offer flexibility, scalability and resilience.
With the complexity of documents and the increase in business, it is dangerous to use only strict rules. Artificial intelligence-driven parsing is not a technological improvement, it is a competitive edge.
Ultimately, the most suitable solution is the one that expands with your documents as opposed to the one that falls when they vary.
