To add a new department, navigate to Administration>Setup>Departments (Note: You must be setup as a system administrator to have access to this tab).
Once in the department tab, select + New Department.
First, enter the department name in the corresponding field and a description if desired. Next, create a scheduling template for your department by inputting a name and display name in the respective fields and selecting Add New (it is recommended to have the template name and display name be the same).
To enable e-mail notifications for the department, check the box next to the referenced setting.
Once the above is completed, click Save Changes and the department will be saved.