I'm not sure if this is appropriate for stack overflow but we have recently upgrade to TFS 2012 and noticed that your iterations (sprints) must be children of the backlog iteration. While the tool is rigid in that approach, I'm trying to understand if there is a specific Agile [Scrum] process reason to adhere to this or a tooling concern as to why I cannot have the backlog and sprints be under two different parents?
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I've never looked at it as a bad thing, as I always found it makes sense. The Backlog contains all PBI's that make up the product or are desirements for the future of the product, as such it's one big list. The Sprints each are a chunck of stories from that list, but they're still part of that list. Since the sprints can be in the past, present and future in TFS, they together form the complete backlog.
Is there a reason you'd want it to explicitly not be a hierarchy?
If that's the case then you can opt to create multiple teams (if needed with the same members) to look at different backlogs in the same Team Foundation Project.

jessehouwing
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Our agile process is slightly unique perspective on scrum in that we have a series of short cycle products so our sprints encompass releases for many products. In essence we made our sprint team oriented so teams work well for us. I'm asking because we used to use urban turtle on tfs 2010 and didn't enforce this structure. – Scott Dec 11 '13 at 04:05
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... We had a parent node for backlog then a parent node for current which contained multiple parallel sprints. We also had a deployed parent. When sprints got planned and committed to, a new sprint was created under current and the completed one was moved under deployed. I'm not saying tfs 2012 is wrong. In fact we adapted to fit under it but I didn't know what reasoning was behind the lack of flexibility that we had under urban turtle. Always helps to educate my teams on why versus just do it a new way now so I was seeking an explanation where I didn't have one. – Scott Dec 11 '13 at 04:06