SAP BI Upgrade from BI 7.0 to 7.4

Hi All,

My client is planning to Upgrade BI 7.0 to BI 7.4. Currently our system is on (SAP EHP 1 for SAP NetWeaver 7.0). But Functionally 60% of BI objects are still on 3.5 flow. My question to all experties that

1) Can we Technically migrate the system from (SAP EHP 1 for SAP NetWeaver 7.0) to BI 7.4, without functionally migrating 3.5 objects to 7.O first? Will be there any drawback of following this sequence.

2) Can we go for Technical upgrade 7.O -> 7.4 , followed by Functional Upgrade of 3.5 Flow Objects? (We have SEM-BW component )

Thanks in Advance,

Ranjan