Just a quick post to make you know that, with update of 10 December 2015, VSTS now support a basic form of Work Item customization.
You can add new fields in existing work item and you can also rearrange the layout of Work Items. The experience is completely web based, no more download XML Work Item Type Definition and Manually edit XML Files (or use Power Tools in VS).
This new way to customize Process Template is based on a new functionality of Team Process Templates called: Process Inheritance. With this model the original process created by Microsoft remains unchanged, and you can edit a personal model that inherits from the original one. This makes possible for MS to update the “Master” template, without interfering with your customization.
You can read more on this old post: Visual Studio Online Process Customization Update
Another good reason to migrate to VSTS :)