PSG won 3-0 at Stamford Bridge last night to follow up on their first-leg 5-2 triumph.
“That is a real leveller of where this club is. Paris is the gold standard," said Cole in reaction.
“They are the Champions of Europe – it shows that Chelsea are a million miles away over the course of the two legs.
“Chelsea equipped themselves for 75 minutes but games are about crucial moments and what you do.
“This isn’t a Liam Rosenior problem. Liam’s doing what he’s doing, he’s just come through the door.
“This is a problem with the strategy and direction, where the club are going.”
The 44-year-old continued: “This is a real eye opener for where we are as a club at the moment.
“It’s a lot of money that’s been spent and there should be a real think of what we’re doing and how we’re doing it.
“That is just simply not good enough. There are 20-year-olds and 19-year-olds on the pitch tonight.
“There’s time for them to grow and improve and get better. Tonight’s not their night and they’ll have better nights in their career.
“As a football club, you’ve got to go football club first, not business first, or you’ll get performances like that.”