It was a process of capturing human-marked data from document forms such as surveys and tests. This opened the option of automated marking of multiple choice tests and exams for professors.
IBM was granted a patent in 1960 and offered the IBM 1230 Optical mark scoring reader in 1962.
Originally the system was quite limited, with a test maximum of 80 questions. Using an HB pencil, students would blank out the circles on special pre-printed answer sheet. The sheets then would be fed into the IMB reader and the results would come out the opposite side of the machine.
In the photo, two women are working with an IBM automated exam marker at the University of Saskatchewan in February 1966. The woman on the right is feeding the exam papers into the machine, where they are scanned. The second woman is gathering the results in the form of computer punch cards.