The Irons were torn apart by a rampant Gunners side who ran in four goals in the space of 10 minutes at the start of the second half of Wednesday night's Barclays Premier League encounter at Emirates Stadium, which was overshadowed by a serious head injury to young West Ham defender Daniel Potts, who remains in hospital for further observation.
Things had started well for the visitors, who weathered early Arsenal pressure to take the lead after 18 minutes when Collison crashed in a 20-yard effort following a corner.
However, Lukas Podolski's fine strike sent the sides in level at the break and Arsenal came out on fire following the restart.
Olivier Giroud clipped the ball home at the near post, before Podolski stretched the Irons down the left channel to set up Santi Cazorla, Theo Walcott and Giroud again to put the home side out of sight before the hour.
From then on in, it was a case of damage limitation for the Irons, and Collison maintains the squad will use their break from FA Cup action this weekend to focus on putting things right in their next Premier League outing at Craven Cottage.
"We defended well in the first half, and created a couple of chances. Then we had 10 minutes of poor defending and when you do that against a team like Arsenal, they are going to cut you open," said Collison, who is slowly building up his match fitness following six months out with a knee injury.
"As a team, we know that is not good enough and it is up to us to pick ourselves up.
"The manager has not got to tell us it was not good enough, we know that. We have to get ourselves back up and go for the Fulham game."
West Ham missed the chance to secure their place in the fourth round of the FA Cup this weekend when they failed to see off Manchester United at Upton Park and then lost the replay at Old Trafford with a much-changed side.
Collison, though, feels having some extra time to focus on the challenges ahead over the second half of the Premier League season will see everyone refreshed as Sam Allardyce's men look to consolidate their mid-table position and not get dragged down into the battle for survival.
"We have had a lot of games lately, so now it will be a chance for the players to recharge their batteries and give the manager a chance to do a bit of work with us on the training pitch," Collison said.
"When we come to take on Fulham in a week's time, we will all be ready and raring to go, looking to put right the mistakes we made at Arsenal."
Potts had replaced Collison just after the hour, but would end up being carried off on a stretcher following a heavy fall in which he suffered a nasty concussion.
A club statement this morning confirmed the 18-year-old defender, recently recalled from a loan spell at Colchester, was set for some more observations in hospital.
Collison send a message of support from the West Ham squad.
He said: "Pottsy has been magnificent for us over the past few weeks and it was great for him to get a chance at a place like Arsenal, because he has worked so hard for it."
"The medical team did well, he is in the best hands."
"All of our thoughts are with him and we wish him a speedy recovery."