We have multiple teams pulling from a shared backlog.
When an issue is moved out of the backlog to, say, Team A's Sprint #1, I'd like JIRA to automatically assign the issue to Team A - instead of having to manually set the Development Team field each time.
Conversely, if the issue gets moved into out of a sprint into the general backlog, I'd like JIRA to automatically set the Development Team field to (blank).
Is this a configuration that exists now?
Nope, something like this does not exists (not out of the box). Moreover, a ticket can only be assigned to one JIRA account. Unless you have an account called "Team A" or you update a certain field in a JIRA ticket to know which team it belongs to (I'm kinda confused on your verbiage on "assign the issue to Team A and updating the "Development Team field"). So you can ignore my concern here if I misunderstood that part.
What you want here can be accomplished with scripting and some plugins. If you want to go that route, We can suggest a few things for you to try (like a simple post-function script can do some of this).
I should clarify, I believe our Development Team field is a custom field, as opposed to assigning the issue to a specific account - we would like to have the Custom Field of Development Team populate with the Team associated with the Iteration (as our Iterations are divided by team - Team A - Iteration 1, Team A - Iteration 2, etc)
But I figured this would be custom, just wanted to see if there were obvious workarounds that folks knew about.
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