What is the best practice for setting up TFS for agile development?

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I'm thinking of giving each part of the agile lifecycle its own project (TFS project, not csproj) as per Microsoft's agile template.

  • Is it possible to move items (like User Stories or Tasks) from one Project to another?
  • Does the organization of these projects have any bearing on or affect the actual software build (solutions, csproj, etc)?
  • What is the recommended organizational structure of Projects, etc for an agile project?
  • Are there any guides you can recommend for setting TFS up to work with the standard agile process?
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Do not set up multiple TFS projects for the same team/product line. You can't move things from one to another and they won't be able to share a common parent source control so you would miss out on much of what source control has to offer. Do some research by reading the links on the other answers.

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I have never heard such a strange idea.

You should have one team project for each endeavor. Basically, a team project is the intersection of a team with a project.