A method for optimally producing a holographic image using a Holographic Optical Element (HOE) and the HOE meant for controlling directions and divergences of light beams to impart system compactness. The system uses concave and convex lenses and other beam expanding, splitting, modulating and combining optics for realization of compactness and high throughput. The thin laser beam is split using a holographic optical element and a conventional beam splitter. A neutral density filter adjusts the intensity of a reference beam to match the intensity of an object beam so that high quality digital holograms can be recorded. Effects of vibrations are minimized by the compact optical design, by anti-vibration mounts, by mounting all the opto-mechanical components on a single rigid platform and by enclosing the system. An electro-optical sensor array records holograms digitally and an algorithm numerically reconstructs and further quantifies the results using a personal computer/laptop/tablet etc.