Hi Sel,
As Eduardo mentioned, you will need to apply at least a couple of Basis Support Packs to your source system before you detach it, as you aren't yet on the minimum Basis SP for SQL 2012. Otherwise, there are no mandatory "pre"-steps before you detach the database, although you may want to suspend all scheduled jobs. After you attach the database on the target system, you will install your SAP system around it using SWPM, using the "system copy - target system installation" options (found under your product and "software lifecycle options". Most of the post-copy steps are handled automatically by the SWPM tool. Once the tool is complete, however, there are a number of manual post-copy steps to follow before restarting productive operation. These are all detailed in the system copy guide. It's critical to follow the guide. The guide is at http://service.sap.com/instguides-> SAP NetWeaver -> SAP NetWeaver 7.0 (2004s) -> Installation -> 2 - Installation - SAP NetWeaver Systems -> System Copy: Systems Based on SAP NetWeaver 7.0/7.0 EHPs -> Windows: ABAP. Note, while you are here, also pick up the guide at Installation: Systems Based on SAP NetWeaver 7.0 / 7.0 EHPs. This has information about installation prerequisites and installing the diagnostics agent.
SWPM will handle installing the kernel for your target system. The only thing you must have installed beforehand is the DBMS (SQL 2012 w/ SP2 and CU5, preferably). Optionally, you might also use SWPM to install the Diagnostics Agent before you do the target system installation.
You will need to download the latest version of SWPM and the latest kernel installation (not patch) media for your target system. Find them at https://support.sap.com/software/installations.html-> Browse our download catalog... (then for SWPM) -> SAP Application Components -> SAP ERP -> SAP ERP 6.0-> SOFTWARE PROVISIONING MGR 1.0 -> Windows on x64 64bit -> 70SWPM10SP07_6-20009707.sar (and for the kernel) -> SAP Technology Components -> SL TOOLSET -> SL TOOLSET 1.0 -> Kernel for installation/SWPM -> SAP KERNEL 7.21 EXT 64-BIT (probably not UC, unless you are already on Unicode or want to do a Unicode conversion at the same time -- you'll have to check your system and make sure you get the appropriate kernel; note, if you do the diagnostics agent installation with SWPM, it requires the unicode kernel).
Database users are handled by the SWPM tool as well. If you run it as a domain admin, it will create the users and groups required. If you aren't a domain admin, you can get the users and groups created in advance, and it will then create the required local OS and DB permissions for them. Creating the users in advance is detailed in the installation guide (not the system copy guide), so you may want to obtain a copy of that, too.
Just to clarify: you are not upgrading your kernel before or after the system copy; you are upgrading it as part of the system copy (at the same time). Windows and SQL 2012 require a different version of the kernel than Windows 2003 and SQL 2005, and it is not compatible with those earlier versions of Windows, so you can't upgrade in advance. Likewise, your old kernel is not compatible with Win2012. You are going to be upgrading from your 700 kernel to 721_EXT.
Because you are also migrating from a 7.0x kernel to a 7.2x kernel, there are some other steps you must take (you can do these after the system copy, on the target system). You need to pay attention to Note 1713986 (Installatoin of kernel 721 (EXT)), specifically points 6.5 (rslg/new_layout = 9), 6.6 (rdisp/wp_no_restricted = 0, rdisp/configurable_wp_no = 0, rdisp/dynamic_wp_check = FALSE, rdisp/wp_max_no = ?), 7.2 (DDIC_TYPELENG_INCONSISTENT errors), and 7.3 (ABAP load format).
You might also want to have a look at my blogs at SQL Server 2012 Installation Recommendations and SQL Server Configuration: Pre-SAP Installation.
Cheers,
Matt