Data Capture Vs. Data Entry: Battle of the Data | Xtracta

By 2021-06-30 Blog
A businessman manually typing data into a computer system


Data arrives in many forms and formats, and a streamlined business will have a strategy to input that data effectively. Today, businesses must strike the right balance between the adaptability of hands-on manual data entry and the efficiency of automated data capture, bridging the divide between the past and the future to develop a successful, holistic approach.
Below, we break down the principles of automated data capture versus manual data entry, discussing how each plays a role in business operations and what companies can do to leverage them successfully.


What is Manual Data Entry?

Manual data entry is a process of inputting and storing data from documents (text and numbers) into an electronic system. Traditionally, this process involves data entry operators manually transcribing data from one format to another, and data entry is still largely run by this human-driven approach today.

If we date back 20-30 years, to a time when computer systems were not as technically advanced, the bulk of data entry work would be completed by a person sitting behind a desk with a pile of documents or digital reports, manually copying them to a digital format compatible with their system.

While manual data entry is prone to human error when it comes to implementing an approach to data processing that is accurate and cost-effective, automated data capture may be the better option.

What is Automated Data Capture?

Automated data capture, by comparison, is a process of extracting information from a scanned or digital document (receipts, contracts, books, etc.,) and turning it into data that is readable by a system.

To transfer data from a physical document—such as an A4 spreadsheet or signed contract—with the use of data capture software, an employee simply needs to take a photo of the document or scan it into the system. The data capture software will then automatically convert the information within seconds into a compatible digital format. Once this process is complete, the data can easily be exported to a spreadsheet or other indexing format to be stored or shared as needed.

Compared to the labour-intensive approach of manual data entry, data capture services offer quick turnaround times with cost-effective and accurate results. Advantages for automated data processing include:

  • Faster form processing and highly reduced downstream consequences (e.g., invoicing backlogs, poor client experience, and strained vendor relationships).
  • Enhanced employee value and reduced physical and psychological stress associated with excessive data entry work.
  • More accurate results and reduced errors as automated processes significantly reduce errors compared to manual data entry.
  • Lower overall costs associated with reduced human error and reduced time spent entering data manually. Automated data capture also reduces the need for employers to hire staff solely for manual data entry.

The Persistence of Manual Data Entry in Business Operations

The current trend within the industry (and what Xtracta aims to do) is to reduce—and potentially remove—the need for manual data entry in business altogether.

For many industries, manual data has remained doggedly persistent, especially when it comes to the management of operational costs and accounts payable. However, it is increasingly problematic for organisations to rely so heavily on manual data input. Within today’s data-rich landscape, organisations depend on data to inform their strategies, covering everything from general decision making to establishing business goals and developing strategies for responding to change.

As organisations grow, so too does the need to gather data in larger quantities and at higher speeds. Manual data entry simply cannot keep up with this demand. While this drag on efficiency may not have an obvious short-term impact for many companies, in the long run, the limitations of manual data entry can make it far more difficult for companies to move forward.

How Labour Arbitrage Fits In

To reduce the costs associated with manual data entry, many companies choose to invest in a process called “labour arbitrage”. Labour arbitrage refers to the financial savings an organisation can make when hiring remotely or outsourcing work to low-wage economies.

For example, many companies would traditionally outsource the bulk of their manual data work to lower-wage countries like the Philippines, China, or India, to reduce their overall business costs.

However, when it comes to relying on an outsourcing model to reduce costs, offshoring has its own drawbacks for companies to consider.

The Drawbacks of Labour Arbitrage

Essentially, when the bulk of data processing is completed via human labour and outsourcing centres, the quality of the results is much more likely to suffer from mistakes and errors.

For example, new employees working in manual data entry may not have the industry knowledge necessary to understand the implications of the data they are entering. This can lead to lower levels of accuracy. To avoid this, companies end up needing additional processes (e.g., more extensive training, and quality assurance), to ensure that manual data entry is done correctly.

Additionally, while an outsourcing model of data processing can be used to reduce costs from an external source, it can also end up drawing attention away from investing in valuable internal productivity improvements for an organisation (a.k.a., dealing with the root of the issue).

Combined Approach to Improving Business Operations

Many companies have started looking to new technologies such as data automation models to upscale their workforce and improve their productivity, even when they already have an outsourcing model in place.

From Xtracta’s point of view, combining an onshore or offshore workforce with an automated data processing model is not only achievable, but the best way to enhance a company’s accuracy, work output, and client satisfaction while saving on costs.

Talk to the Xtracta team today about integrating automated data capture software into your business’ strategy model

With automated data capture and intelligent document processing solutions, you can put your staff’s time and effort where they are most needed and minimise time spent dealing with inefficiencies.

From invoice scanning and data capture to receipt OCR, our AI-enhanced data extraction software is the ideal solution for companies looking to minimise costs and increase revenue.

To learn more about the advantages of Xtracta’s document automation software for your business, get in touch with one of our friendly staff members today!