Here's an example of converting paper drawings to CAD. The drawing below is a scanned image of a blueprint.

Before CAD conversion
The same drawing after conversion to an AutoCAD file is shown below. It's drawn to scale with the addition of color using the client's layering scheme.

After CAD conversion
How do we do it? After scanning the original drawing, we import the resulting raster (bitmap) image into AutoCAD, then electronically trace each line and convert it into a CAD object. This process is called vectorization. We can also create raster/vector hybrids, if only part of the image needs to be converted into CAD. Finally, we tweak the drawing if necessary to make it dimensionally accurate, place each object on the proper layer, convert it to the appropriate linetype and add color.