"It's a big couple of weeks coming up, there's another step up needed from us," said Holley, after the Ospreys beat Edinburgh 33-16 in Swansea at the weekend.
"Alun Wyn (Jones) told the boys in the dressing room that there we are 10 per cent away at the moment.
"They recognise that, as coaches we recognise that, and over the next eight days until we go to Munster that will be our focus."
The Ospreys began their latest continental quest to become European kings with a narrow loss to Amlin Challenge Cup finalists RC Toulon back in October before bouncing back with a convincing home win over London Irish.
Now the back-to-back fixtures against 2006 and 2008 tournament winners Munster will play a major role in deciding the fate of a group in which each of the four teams boast a win and a loss from their opening two matches.
The Ospreys gave a number of their high-profile international stars time off in the build up to the win over Edinburgh, a decision that Holley hopes will pay dividends at one of European rugby's most feared venues.
"We've tried all ways to reintegrate the international players over the years and it's not always gone smoothly," added Holley.
"This year we gave the boys three or four days off, just to refresh mentally, which puts pressure on us in terms of how much time we had with them to prepare. We've got through and there are positives to take from it. Clearly there are areas to work on and we'll spend next week doing just that.
"We've got Munster back to back now and it's no different for them: they've missed a lot of boys over the last month or so, so it's just about who gels the quickest.
"We're always positive. We're looking reasonably healthy in terms of the squad and some boys got a good run out there which will benefit them. There's a lot of competition for places, so it should be an interesting week coming up."