And based on the loss the Waratahs suffered to the Reds in their last warm-up game at the weekend, the Australians will need to be considerably more competitive in Nelson, he said.
"Our lineout operated ok but our maul was not as efficient as it needs to be. Our scrum was ok at times and then faltered at times – at critical moments too.
"We had some soft moments. So it was a mixed bag on that front. And we were a mixed bag across the park really all evening," he said.
Competing in those areas would be important if the team were to be competitive with the ruthless Crusaders and they would suffer similarly as they had against the Reds if they could not strengthen their set piece.
"It's the heart and soul of your team, your set piece, and we did hit some wobbles.
"I think we're good enough to be better, we just weren't tonight – and there'll be some repercussions for that."
Defence had also been an issue for Penney and the implications of that would be obvious against a Crusaders team with a reputation for punishing opposition mistakes.
"The most disappointing factor was our lack of stickability in the tackle.
"We were inefficient in our ability to hit and stick and live in the battle in the breakdown.
"The defensive side of the ball really sets your attitude and it probably indicated something wasn't quite right or where it needed to be," he said.
Penney announced that Siosifa Lisala, the Tongan-born Japanese international would be joining the side for the Super Rugby season.
Penney, who had coached Lisala in Japan, was alerted to his interest in playing Super Rugby and made contact to bring him to Sydney.
"Siosifa has a fantastic skill-set, he can play right across the backline and, most importantly, he's a good team man who understands what we're trying to build here at the Waratahs," he said.
"He already knows the system of play we're implementing and will come in ready to go off the back of his season with Shokki.
"I've got not doubt he'll fit into the group really well, adding depth to our backline and another dimension to our attack with his damaging ball running – he's a phenomenal athlete.
"Siosifa has all the attributes we're looking for, he's got runs on the board at international level and I think he'll be a really exciting addition to our squad," he said.