Cesare Prandelli says his side still needs to improve despite holding world champions Spain to a 1-1 draw in their European Championship Group C opener on Sunday.
Italy enjoyed the better of the first period and remained dangerous throughout despite the Euro holders taking control in the second half.
Substitute Antonio Di Natale gave them the lead with virtually his first touch in the 61st minute but Italy could not hold on for long and Cesc Fabregas replied just three minutes later.
Crucially though, Italy proved able to compete with the Spanish and until Fernando Torres spurned two great chances at the end, they had enjoyed the better opportunities and more of them.
Yet that is not enough for Prandelli.
"The disappointing thing is that the players also realise we gave them the chance to equalise straight away," said Prandelli.
"It was with difficulty that we got in front against the world champions, but we were there, we wanted to play.
"We've given Spain the opportunity to equalise so we have to improve and that's the mentality we need."
Prandelli admitted he was surprised at Spain counterpart Vicente Del Bosque's decision to start the game without a recognised striker.
The Italian too made a surprising choice as he plumped for central midfielder Daniele De Rossi in the middle of a three-man defence.
Spain's best spell came when Torres came on for Fabregas, although Prandelli denied that was due to him getting his tactics wrong.
"We were surprised (that Spain played with no forward) but decided to keep our system, we tried because we hurt Spain on the flanks," said Prandelli.
"With Torres we gave away two chances but we created our own problems, on the second De Rossi made a mistake and forced the other centre back to double up."
Torres missed a one-on-one chance and then lobbed the ball over the bar when he could have played Jesus Navas in free instead.
However Italy had had their own gilt edged chance before Di Natale came on when Mario Balotelli raced clear after a mistake from Sergio Ramos.
But the young forward dallied and gave the Spanish defender the chance to recover.
Moments later Prandelli hauled him off but he said the two incidents weren't related.
"When (Balotelli) missed this chance the substitution with Toto (Di Natale) was already planned," he said.
"We needed more punch in the final third and after that we had some good chances.
"When a player misses a chance and takes a decision that wasn't the most logical there's no reason to punish him.
"It can be complicated when you have two options whereas when there's only one you just do it.
"The problem was that we wanted one of the strikers, predominantly (Balotelli) to go deeper.
"Cassano played a generous match and did everything we asked of him. I'll probably reconfirm them both (for the next match).
"With Mario you have to remember how he created the chance, a player with his characteristics can and should help the team."
Italy midfielder Claudio Marchisio praised the contribution of De Rossi and said it wasn't easy playing against a team with no striker.
"As well as being a very good midfielder Daniele is an adaptable player, he's a great alternative in defence so it wasn't a problem," he said.
"They don't give you a point of reference, it's not easy to play against a team without a point of reference."