City's 1-1 draw with Millwall at The Den this Friday night meant Parkinson's men lost their two-legged semi-final with the Lions 4-2 on aggregate.
Despite the eventual scoreline, Parkinson knows that City had their chances in both matches to make it a far tighter encounter between the two sides.
Looking back upon the campaign as a whole, 80 points and a fifth-placed league position should be seen as a genuine step forward from City this season, but Parkinson says he knows the club must kick on again as they target future success.
Parkinson said: "Looking back on the tie as a whole, it is the first 45 minutes in the first leg that has cost us. The lads have given us everything tonight (Friday) but a couple of key moments at our place have proved decisive.
"The players have given their very best for the club this season - they have been tremendous - but we've just come up a little bit short.
"They (Millwall) were very disciplined and hard to break down in the second period and we probably just lacked that little bit of quality in the final third to open them up.
"Millwall were very clinical with their chances in both games and that has proved the difference.
"The lads are obviously down at the moment but they can be very proud of how they have represented the club this season.
"My job now starting next week is to work on trying to move us on from a play-off team to potentially challenging for the top two.
"We have to dust ourselves down and get ready to mount a challenge again. We must look at the areas where we need to improve.
"We obviously need to add players to what we already have in the building. We want to add further quality to our squad to make it as strong as possible.
"The work for next season begins on Monday."
City lost Josh Cullen to an ankle injury at half time at The Den following the midfielder's crunching 50-50 tackle with Chris Taylor towards the end of the first half.
Parkinson said: "He was magnificent for us in the first half - probably one of the best players on the pitch.
"To lose him at half time was certainly a blow.
"He damaged his ankle ligaments but hopefully it isn't too serious."
Friday night's game with Millwall was City's 55th fixture of the 2015/2016 campaign. Speaking after the Bantams' final encounter of the season, Parkinson was full of praise for the backing given by the club's supporters over the past ten months.
Parkinson added: "I'd like to thank the supporters for coming down in their numbers again to support the lads.
"They have been magnificent for us throughout the whole season, both home and away.
"They have also conducted themselves brilliantly. They are a credit to the club - the loyalty they have shown once more has been fantastic."