We have been required for years to use both a Transponder and Encoder in controlled airspace. This combination allows altitude reporting to ATC, and is known as "Mode C" operation. "Mode S" is the next step. A Mode S transponder (which still requires an Encoder for altitude information) transmits aircraft-specific identifying information to ATC. You might want to provide Mode S information to ATC or you might be required to do so as part of a Commercial operation. Mode S operation is also required in Europe.
Please note that while Mode S is helpful, it does not meet the ADS-B 2020 mandate by itself. However, some Mode S Transponders with Extended Squitter can be used as a building block in an ADS-B system.