Looking for best Cutover Approach.

Hi Experts,
We are in the Testing Phase and are looking out for approaches for Cutover. Please note current set up in PRD is 3.5 Backend running on BI 7 Frontend. There is only 1 server and client each for DEV, TST and PRD with a spare server targeted for set up as application server in the near future :
i) Option 1 - parallel 3.5 and 7 environments ((if technically feasible), preferred by client)
- use application server in the interim as backup server with copy of current PRD while cutover takes place on main server. Team still is unsure technically how much effort and level of difficulty to either Update R/3 to BI 7 then update BW 3.5 or (ii) Set up R/3 to update both 3.5 and 7. Detailed investigation required but both cases require additional DEV and TST boxes to simulate chose option.
ii) Option 2 - big bang to BI 7 (medium risk, recommended by us)
- once BI 7 objects migrated to TST and DEV, Support team and users are no longer able to access old reports to perform fixes or data validation.
Would you be able to advise on which approach is typically taken during 3.5 to 7 upgrades and if Option 1, what are the complexities and considerations required.
Your time is much appreciated.
Thanks,
Chandu

the way it works usually is ..
Take a copy of PRD and migrate. Test this system completely - usually takes about 2 to 4 weeks of full testing and signoff.
The you will go into a DEV FREEZE - this means that no requests can be transported in this period.
Upgrade DEV and test - takes about 2 weeks since you already know the critical objects to test.
Teh upgrade QA - test for 2 to 3 days since most of the functionality has already been tested twice.
Upgrade PRD and go live on 7.0.
Also you can look at splitting the upgrade into Database upgradation first and then once there are no issues - go ahead with NW upgrade....

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