Document automation stands as a beacon for democratizing information access. It dramatically empowers teams from diverse backgrounds, languages, and cultures to communicate and collaborate more efficiently.

“Automation applied to an efficient operation will magnify the efficiency,”

Bill Gates once said, and statistics back up his claim.

Over the past two years, 91% of organizations report a surge in automation requests from their business units.

That said, how do you best automate document processing (ADP) within your organization? And how can businesses achieve the highest possible ROI from adopting ADP (and measure it)?

Keep reading to find out — below, we’ll explain how automated document processing works, benefits and measuring ROI, and cover possible ADP use cases.

Let’s get to it!

Key takeaways

  • ADP uses AI, machine learning, and robotic process automation to make documents work faster and smarter.
  • Cloud technologies empower ADP platforms by enabling scalability, cost savings, and a collaborative approach to document management.
  • Adopting ADP solutions can significantly boost workflow productivity, maintain data integrity and free up time for employees to focus on other tasks.
  • The core challenges with ADP are data privacy concerns, software limitations, and implementation barriers — which professional ADP solutions can help resolve.

The basics of automated document processing

If you blend human ingenuity with robotic precision, you’ll get a solution that reshapes how businesses manage data and information.

This synergy enables businesses to make nuanced decisions rooted in human experience and intuition, and machines execute these decisions with speed and accuracy.

Drawing from that human-robotic basis, automated document processing uses the capabilities of artificial intelligence, machine learning, and robotic process automation to simplify document workflows for employees, helping them make more informed decisions.

ADP has become an essential tool for both small and large businesses alike looking to give themselves a digital makeover.

It allows business owners to transition from obsolete manual data extraction methods to automated processing of emails, contracts, reports, and so forth.

infographic which shows the global intelligent document processing market is projected to grow at a CAGR of 30.1% from 2023 to 2030

Currently, the global intelligent document processing market is projected to grow at a CAGR of 30.1% from 2023 to 2030, and its rise is attributed to the high efficiency of ADP in trimming manual and error-prone tasks.

Machine capabilities to understand document contexts, identify essential information, and scan for compliance issues further boost ADP adoption.

ADP wouldn’t be what it is today without cloud-based systems. Before cloud services became popular, employees typically had to edit and share their paperwork using offline editors, which was both time-consuming and cumbersome.

Cloud services changed this by offering seamless real-time collaboration on documents among multiple users.

In addition, using the cloud provides easy, remote access to documents via scalable storage solutions, and are less costly than traditional hardware and physical servers.

The evolution of automated document processing

ADP started with early mechanized techniques; later, sophisticated machine learning algorithms and AI helped it mature into intelligent document processing.

Today, ADP is continually evolving, adapting to the demands of an ever-changing digital landscape.

The roots of modern ADP can be traced back to the 1960s and 1970s, when the first word processors and personal computers were created. Users soon started creating, editing, formatting, and printing documents electronically.

Another technology that greatly impacted ADP was optical character recognition (OCR).

In 1965, American inventor Jacob Rabinow developed an OCR machine that helped sort mail for the post office. A year later, IBM unveiled its scanner IBM 128 to read handwritten numbers.

By the 1990s, significant progress in ML algorithms and deep learning, coupled with hardware advances, allowed for more accurate and efficient processing of many document types.

The late 2000s and early 2010s saw the rise of cloud-based OCR services offered by major cloud providers, including Microsoft Azure, Google Cloud, and Amazon Web Services.

In 2012, data scientists made a significant breakthrough by introducing deep learning algorithms to power OCR based on convolutional neural networks (CNN).

These algorithms elevated image classification, object recognition, and text recognition.

The AI touch has turned modern ADP systems into intelligent document processing systems that can achieve an average accuracy rate of 90% and higher and process documents in over 100 languages. Their robustness continues to drive market growth.

How automated document processing works

ADP is a systematic approach to managing and processing documents that can be broken down into six core steps.

six core steps of a managing and processing documents infografic


The automated solution gathers all relevant documents. This can involve scanning physical documents or collecting digital ones from various sources.


Before the actual processing begins, documents undergo preprocessing to enhance their quality, which can include noise reduction, skew correction, and binarization.


All documents get categorized based on their content or format. For instance, invoices can be separated from contracts.


The automated solution extracts relevant data, such as names, dates, or amounts, from the classified documents.


The extracted data then goes through verification and validation to ensure the highest possible accuracy. The system can do that by using predefined rules or cross-referencing with other data sources.


Finally, the validated data gets integrated into the database, and users can access it for analysis.

How to measure the ROI of automated document processing

When you need to quantify the financial returns from your investment relative to its cost, you need a return on investment formula.

ROI formula 
ROI = (Total revenue − Total costs)​ / Total costs x 100%

If your business already uses or plans on adopting ADP solutions, you can measure the effectiveness in terms of monetary benefits.

A positive ROI means that an automation solution you use is profitable, while a negative ROI would alert you to necessary changes that need to be made regarding what solution you’re currently using and how you’re using it.

Measuring costs

When looking at the total costs, you should factor in these key expenses:

  • Software licensing or subscription fees are your upfront cost for the software solution.
  • Hardware and infrastructure expenditures, including servers and storage, can be substantial.
  • Solution implementation and integration costs involve setting up the solution, integrating it with your existing systems, and making it functional.

Training and change management that your team will require comes with a price, but necessary to help your team make a smooth transition from legacy systems.

Measuring benefits

ADP solutions offer various benefits, such as:

  1. Time savings enabled by automation free up staff time and expedite business operations.
  2. The number of errors that automated systems can potentially make is generally much, much less than that of a human employee processing a document manually.
  3. A productivity increase comes when employees can handle more documents monthly, and the processing time is often reduced by half or more with the help of document management software.
  4. Customer satisfaction rates spring upward thanks to faster and more accurate document processing that reduces the time customers may waste waiting.

By understanding the ROI of automated document processing, you can justify your investment and understand the bottlenecks that require improvements.

Key challenges in ADP addressed by professional document management solutions

Automated document processing offers tangible benefits, but it’s not without its challenges. From data privacy to implementation barriers, businesses often grapple with a number of ADP-related concerns.

Your business can sort these concerns out if you opt for professional assistance from platform solutions like PandaDoc that provide document management services designed to optimize workflows.

Data privacy concerns

Your business is highly likely to rely on a number of digital platforms, processing and storing massive volumes of sensitive data.

That brings forth worries about data safety and how to escape data breaches that might have catastrophic consequences.

Pro-level document management software employs the latest encryption methods and aligns with global security standards. Every piece of information gets shielded from potential threats.

If you consider cooperating with a provider who shares a transparent data privacy policy and commitment to data protection, you can keep your business on the safe side and keep confidential information secure.

Software limitations

The diverse nature of business operations means document types and formats can vary widely. Some ADP solutions might falter when faced with unconventional document structures.

Flexibility is at the core of a professional solution. Whether it’s contracts, invoices, or intricate reports, a provider’s system should process them with high precision.

A solution that is worth your investment should be designed with a deep understanding of business complexities.

Integration capabilities and custom templates can further enhance the solution’s adaptability to your needs.

Cost concerns

Every business decision should be driven by your financial wisdom. This is especially true if you’re running a small or medium-sized business and seeking the right ADP solution to cut costs of document management.

Some providers approach pricing with a keen understanding of business dynamics.

For example, at PandaDoc we offer simple and scalable pricing, helping businesses of all sizes benefit from the solution’s capabilities.

Reduced manual errors, time savings, and enhanced customer experiences ensure an ROI that outweighs the initial expenses.

Implementation barriers

Even beneficial changes can be intimidating for your employees accustomed to traditional methods.

To smoothly transition from outdated to automated processes, your business will require both technology updates and shifts in organizational culture.

Recognizing the human aspect of technological change, solution providers offer training resources that suit everyone, from tech enthusiasts to traditionalists.

They also allocate dedicated support teams to ensure that the transition is smooth and empowering for employees.

IRL examples of ADP

Here are some real-world use cases that will clearly show you why ADP is a bridge connecting piles of scattered documents into a cohesive landscape.

Tax season transformed

The annual tax season often overwhelms businesses, making them juggle tax forms, receipts, and supporting documents.

A small business owner has to sift through a year’s worth of documents, including tax forms like their W2s and 1099s and various receipts.

In the past, this would mean hours, if not days, of manual sorting, data entry, and cross-referencing with previous tax records.

For HPC, a US accounting, tax, and advisory firm that has embraced ADP, the company has increased close rates by 20% using automation technology.

AI-powered intelligent document processing helps instantly categorize all the documents, extract relevant data, and compare it with previous years’ filings.

As the user uploads documents, the system immediately flags discrepancies between a vendor invoice and a corresponding bank transaction.

It can also summarize the view of the user’s financials and offer insights based on the tax bracket and industry norms.

Clinics get close to leaving behind traditional paperwork

In the healthcare sector, the daily challenges of processing documents range from patient records and lab results to insurance claims and billing details.

A physician in a bustling city hospital often faces a massive amount of patient charts, diagnostic reports, and referral letters. Manually processing these documents is not only tedious but also prone to errors.

However, once a hospital integrates an ADP system, the potential for change is considerable.

After receiving a patient’s lab results, the physician can swiftly find a relevant patient’s medical history and timely pinpoint any anomalies or critical values. The physician can then save this patient from potential medical complications.

An ADP system can also streamline administrative tasks across the hospital. For example, a leading US provider of in-home care, TheKey, reports saving 3,000 hours annually due to document processing automation with PandaDoc.

They can now avoid downtime and have easy-to-sign contracts and agreements for their patients.

Optimizing inventory and order management

With the countless components, raw materials, and finished products to track, and a myriad of customer orders, manual handling of vast data can result in costly errors.

Knowing that, Rakuten Super Logistics turned to PandaDoc and, as a result, streamlined document workflows and elevated customer experience.

A plant manager at a leading manufacturing facility typically has lots of document-related daily tasks to ensure that inventory levels are optimized and customer orders are processed accurately.

Errors can lead to delayed deliveries, affecting the company’s reputation and bottom line.

With these challenges in mind, the manufacturing unit can adopt a system to automatically scan, categorize, and process documents related to inventory and orders.

When a shipment of raw materials arrives, the system updates the inventory, ensuring timely usage.

Similarly, as customer orders pour in, the ADP system can flag any potential shortages and allow proactive order management.

That reduces holding costs and ensures that the manufacturing unit meets customer demands efficiently.

Minimizing the costs of education

The educational sector is primarily focused on imparting knowledge. However, it also manages student enrollments, academic records, financial aid, and faculty.

If administrative tasks are inefficient, it can hinder the education process. This could cause educational institutions to stray from their core mission.

For example, the founders of the educational program Digital Remit provide workshops and education to business owners around Oxford, London.

Previously, they had their participants spend an hour of each workshop filling out actual (paper-based) paperwork before introducing a document automation system.

Now, with that one change in place, they cut document creation time by 90% and freed up 30% of their teachers’ time.

infografic shows that with document mngmnt system it was possible to cut document creation time by 90% and freed up 30% of teachers' time

Furthermore, the ADP system can help with financial tasks. It can automate the collection of fees, the payment of scholarships, and the processing of grant applications.

By minimizing manual work, this institution can save on administrative expenses, and that can allow for spending more on research, facilities, and student services.

Embrace the power of ADP for your business

Automated document processing stands as a beacon of efficiency, turning routine document tasks into insightful, data-driven actions.

ADP is revolutionizing various sectors, aiding in tasks like tax payments, processing patient medical histories, handling academic admissions, and more.

When looking to adopt ADP solutions, choose a partner that not only grasps the complexities of ADP but also ensures a smooth integration process.