How can I grant different permissions to different departments?

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You should create an "umbrella" project that groups all the department projects. For example, if you have:

ProjectX -> C:\Department A\ProjectX
ProjectY -> C:\ Department A\ProjectY

Then, create a project:

Department A Projects -> C:\Department A

On the "umbrella" project:

1.

Open the project Properties.

2.

Switch to the Security tab.

3.

Clear the Inherit permissions from system option.

4.

Make sure the Administrators group includes the desired users only.

5.

Select the Everyone group and make sure that permissions are set to the minimum. (If you want, you may clear all permissions.)

6.

Define a group named Department A and grant the desired permissions.

7.

Define a group named Department B and grant the desired permissions. (etc.)

8.

Make sure the Inherit permissions from system option is set on all sub-projects and no extra permissions are granted. (See previous FAQ.)

Note: Please read the FAQ "We want to isolate our departments..." below also.