Hi Madhu,
You have currenlty co-deployed MDG on ECC and the final situation should also be a co-deployed MDG?
I would always go for the upgrade. Besides that you have to handle all requests (no open request all should be activated of deleted). The upgrade is just very straight forward. During upgrade you get automaticcaly a list of possible upgrade issues (SPAU, SPDD, SPAU_ENH)
If you start with a fresh MDG 8 system, then you have do much more work.. You have either reimport all the customizing and workbench request. If possible due to version difference, maybe table definitions have been changed. Or you have to manually redo everything.
Unless you want to make a fresh start, because MDG 7 has a lot of custom developments.
At least consider note https://launchpad.support.sap.com/#/notes/2143725/E
There is also a reference to notes about MDG in combination with Simple Finance.
Cheers,
Henk.